Understanding Certificate Holders: Decoding Insurance Jargon For The Uninitiated

A certificate holder is a person or organisation that holds a certificate of insurance (COI) as evidence of insurance maintained by another entity. In other words, they are the recipients of the COI, which outlines the insurance coverage of the policyholder. While being listed as a certificate holder is largely a formality, it does grant the right to be informed about the policy, such as advance notice of the policyholder's decision to cancel it. However, it is important to note that being a certificate holder does not provide any protection or coverage under the policy.

A certificate holder is a person or organisation that holds the certificate

In the context of insurance, a certificate holder is usually a third party that has a vested interest in the insured's business. For example, in commercial real estate, the certificate holder is typically the landlord, property manager, or both. A certificate holder can also be an individual or company that the insured party is working for. For instance, if a photographer rents a space for their studio, the landlord may request to be listed as a certificate holder on the photographer's commercial property insurance policy. This ensures that the photographer maintains insurance coverage during the lease period, providing peace of mind for the landlord.

It is important to distinguish between a certificate holder and an additional insured. While both are third parties that may be named on a COI, an additional insured is entitled to the coverage benefits of the policy. On the other hand, a certificate holder only receives verification of insurance and notifications of any changes to the policy but is not covered by it. Being a certificate holder is primarily a formality, and it does not entitle the holder to any benefits or protection from claims under the insured's policy.

Certificate holders play a crucial role in managing risk and ensuring compliance. By requesting and holding COIs, they can verify that the insured parties they are working with have the necessary coverage to subrogate claims. This helps protect the certificate holder from being held liable in the event of accidents, property damage, or other issues. Regularly checking COIs is essential, as policyholders can modify or cancel their coverage at any time.

A certificate holder is not covered by the policy

A certificate holder is a person or organisation that holds a certificate of insurance (COI) as evidence of insurance coverage held by another entity. A COI is a document that proves an insurance policy exists and outlines the specifics of the policy, such as coverage limits and effective dates. It is important to distinguish a certificate holder from an additional insured. While both are third parties that may be named on a COI, only an additional insured enjoys the benefits and protection of the policy.

A certificate holder is not covered by the insurance policy shown on the COI. They are simply provided with proof that the policyholder has insurance coverage. The certificate holder has no right to make a claim against the policy and will not receive any money as a result of a claim being made. They are also not entitled to any of the benefits of the insurance policy. Being listed as a certificate holder does not come with any protection from claims.

The primary purpose of a certificate holder is to verify insurance coverage. They receive a copy of the COI and are notified of any changes to the policy, such as cancellation, renewal, or expiration. This allows the certificate holder to ensure that the policyholder maintains the required coverage. For example, a landlord may wish to be listed as a certificate holder on their tenant's insurance policy to ensure that they have coverage for the duration of their lease.

It is important to note that a certificate holder may request to be added as an additional insured on the policy. In this case, they would be covered by the policy and could make a claim if necessary. However, by default, a certificate holder is not covered by the policy and should not assume that they have any protection under it.

To summarise, a certificate holder is not covered by the policy shown on the COI. They only hold the certificate as proof of the policyholder's insurance coverage and are not entitled to any benefits or protection under the policy.

A certificate holder can request to be an additional insured

A certificate holder is a person or organisation that holds a certificate of insurance (COI) as proof of insurance coverage. They are usually listed in the designated space on the certificate. The certificate holder is typically the landlord, property manager, or both in the commercial real estate space.

The difference between a certificate holder and an additional insured is that the certificate holder only has proof of insurance, while the additional insured has access to the insurance coverage. The additional insured can make claims under the policy and is provided with protection from risk under the policy terms.

For example, a landlord may wish to be listed as a certificate holder on their tenant's commercial property insurance policy to ensure that the tenant maintains coverage during the lease period. The landlord could also be added as an additional insured on the tenant's policy, which would provide them with coverage under the same policy in case of any claims or damages.

It is important to note that a certificate holder does not have any rights or access to the insurance policy and is not entitled to any benefits unless they are also named as an additional insured on the COI.

A certificate holder has the right to be informed

A certificate holder is a person or organisation that holds a certificate of insurance (COI) from an insured party they are working with. This certificate is proof that the insured party has insurance coverage and is not a guarantee that the certificate holder will be covered by the insured's policy. However, a certificate holder has certain rights, including the right to be informed.

Being listed as a certificate holder does not offer any protection from claims or provide the ability to make a claim on the insured's policy. It is simply a formality and a way for the insured to show that they have the correct coverage. A certificate holder may be an individual or a company that has a vested interest in the insured's business. For example, a landlord may wish to be listed as a certificate holder on their tenant's insurance policy to ensure that they maintain coverage during the period of their lease.

Despite the lack of coverage, being a certificate holder does come with some rights and benefits. One important right of a certificate holder is the right to be informed. This means that the certificate holder should receive advance written notice if the policyholder decides to cancel or make changes to their insurance policy. However, in practice, insurers often fail to notify the certificate holder of these changes. By some estimates, insurers neglect to inform the certificate holder of cancellation in 98% of cases.

The right to be informed is crucial for certificate holders as it allows them to stay updated on the insurance status of the parties they are working with. This information can help certificate holders manage their risks and ensure that they are not held liable for any claims that may arise. It is important for certificate holders to regularly request and review COIs to confirm that coverage is still in place, as policyholders can cancel or modify their insurance policies at any time.

In summary, while a certificate holder does not have the same protections as an additional insured, they do have the right to be informed about the insurance status of the policyholder. This right helps certificate holders protect themselves and make informed decisions about their business relationships.

A certificate holder is usually the landlord, property manager, or both

In insurance terms, a certificate holder is a person or organisation that holds a certificate of insurance (COI) as evidence of insurance maintained by another entity. In the case of real estate, the certificate holder is typically the landlord, property manager, or both.

Being a certificate holder is a formality, and it does not entitle the holder to any benefits of the insurance policy. The certificate holder does, however, have the right to be informed. They may receive advance written notice if the policyholder decides to cancel the policy, although this rarely happens in practice.

A COI's certificate holder is usually listed at the bottom left of the certificate in the designated box. However, if there is not enough space, the broker may note the certificate holder in the Description of Operations or on an Additional Remarks page.

A certificate holder is different from an additional insured. While both are third parties that may be named on a COI, a certificate holder has no protection or coverage under the policy. They cannot file a claim under the policy. The primary purpose of a certificate holder is to verify insurance coverage. They receive notifications when the policy is up for renewal, has expired, or has been cancelled.

Frequently asked questions