It’s amazing how few business owners know the distinction between being a Certificate Holder on a vendor or sub contractor’s policy, and being an Additional Insured. There is a clear, and measurable difference between these two Certificate of Insurance functions. I will try and keep it as simple as possible.
Certificate of Insurance simple shows you proof that the “Named Insured” actually has insurance. Think of it as your sub-contractor gets pulled over, you ask him for his insurance I.D. card, (certificate of insurance) proving that he does in fact maintain insurance. That’s all a Certificate Holder really is, someone who is provided proof the sub has insurance.
Additional Insured is a whole different matter. As an “additional insured” you are actually given coverage, and have rights under the sub-contractor’s policy in the event of a future claim. Some carriers will charge the sub-contractor a premium for this privilege because they are actually conferring coverage.
Bottom line Certificate Holder is simply proof of insurance, where as Additional Insured status gives you coverage and rights under your sub-contractors policy.
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It’s amazing how few business owners know the distinction between being a Certificate Holder on a vendor or sub contractor’s policy, and being an Additional Insured. There is a clear, and measurable difference between these two Certificate of Insurance functions. I will try and keep it as simple as possible.
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