Certificate Holder vs Additional Insured

We’ve just gotten back from a whirlwind of a tradeshow tour, and now that we’ve settled back into our desks, we wanted to take some time to answer a question that seemed to keep coming up.

Whether we’re out at shows or speaking with our clients, we’re often asked to help people understand the difference between additional insureds and certificate holders. We took the opportunity to ask one of our trusted broker partners, Chris Phillips at City Securities, to shine a little light on the subject.

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A certificate of insurance documents insurance coverage that is in effect, and identifies specific dates of coverage by the line of business. It shows coverage was enforced and notes the carrier and limits covered for each line of business. The certificate should be provided to document that a company is insured. The purpose of having a certificate of insurance is simply to prove the insurance and limits enforced. The policy is in effect even though those requesting the certificate may not have coverage rights on the policy specific to them.

As a “Certificate Holder,” you are simply receiving proof of the insurance policies and limits that exist that day.

The purpose of being an additional insured on policy is to provide you with insurance coverage and rights to defense under the policy. This provides the coverage necessary in the event that a claim arises from the actions of your vendor, subcontractor, supplier, tenant, etc.

You may be added as an additional insured through a scheduled endorsement or a blanket endorsement. If the 3rd party adds you through a scheduled endorsement, then your specific name has been given to the insurance carrier and added as an additional insured. In this situation, it is important that you ask for a copy of this endorsement so you can ensure that your name has been listed correctly. If the company has a blanket additional insured endorsement, then you will only receive the coverage you are looking for if you have a signed agreement with this company that requires you to be an additional insured. With this type of endorsement, it is critical that you have this signed agreement.