Everyday we are asked to provide Certificate of Insurance to our clients. I would like to take a moment and explain the different types of Certificates of Insurance and the reason for each.
A Certificate of Insurance provides confirmation to the certificate holder that insurance is in place, usually liability insurance, and the dates that the policy is in force. It also shows the limits of liability that the policy carries.
Certificate Holder as an Additional Insured:
You may be asked to add a certificate holder as an Additional Insured to your insurance policy. This is a common request of general contractors and subcontractors. Additional Insured status provides insurance for the certificate holder/additional insured in the event that they are brought into a liability claim that is related job being performed by the contractor or subcontractor. This would allow the certificate holder/additional insured certain rights under the contractor’s or subcontractor’s insurance policy. The certificate holder/additional insured can use the contractor’s insurance as the first layer of insurance protection. This benefits the certificate holder/additional insured in two ways. First, they don’t have to use their own insurance coverage, thereby maintaining a good claims record with their insurer, and it provides an additional amount of coverage over and above their own.
Who Can Be a Certificate Holder and Additional Insured:
Any person, company, or organization that hires a contractor to do work for them. Typically a project owner and a general contractor will request certificate holder/additional insured status.