Additional Insured vs
Certificate Holder (What's The Difference?)

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What is the difference between an additional insured vs certificate holder? It's important to understand because these two types of coverage are often confused & can expose your business to unnecessary risk.

Additional Insured vs Certificate Holder

Additional Insured vs Certificate Holder

Of all the investments you can make in your business, a liability insurance policy is one of the most important.

This type of insurance safeguards your organization from anyone who claims bodily injury or property damage while on your business' premises or as a result of the products or services you offer.

When you first purchase your liability insurance coverage or you have to add additional employees to your policy, it's important that you have a firm understanding of adding people to your policy who will be covered by it and a certificate of insurance. So what is the difference between an additional insured vs certificate holder?

What Is A Certificate of Insurance?

A certificate of insurance showcases that liability insurance coverage is active and the dates that the policy is active. It also highlights the insurance carrier and the type of coverage you have. However, a certificate of insurance is not insurance coverage itself; rather, it is a document that shows your business is insured. Also known as a COI, you would provide a certificate of insurance to prove that you are insured. As a certificate holder, you receive a copy of the certificate of insurance.

What Is An Additional Insured?

Additional insured vs certificate holder. As the name suggests, an additional insured refers to any person - aside from the business - that is covered by your liability insurance policy. When you add someone to your insurance policy, that person has insurance and is guaranteed to receive the benefits offered by that coverage.

If you do add someone to your insurance policy, it is important that you provide him or her with a copy of the insurance so that he or she can certify coverage. It's also important to note that your insurance provider may raise your premiums when you add additional insure individuals to your insurance policy. The increase in premiums makes sense, as the insurance provider will be covering any claims that are filed against the additional insured individual.

Purpose Of A Certificate Of Insurance & Additional Insured

The purpose of a certificate of insurance is to prove that your company is covered by a liability insurance policy, and that the policy is in effect. It's a way for you to provide proof that your business is insured to whoever may need that proof.

The purpose of an additional insured is to insure another person under your liability insurance policy. By doing so, you will be providing that person with the coverage that is needed should a claim be filed against him or her. So that is the main difference between additional insured vs certificate holder.

The Benefit of a Certificate of Insurance and an Additional Insured

By having a certificate of insurance, you can quickly and easily prove that you have insurance. This can save you from potential headaches and having to contact your insurance company.

The benefit of adding additional insured individuals to your liability insurance policy is the protection it offers your company. For example, should a client file a claim against one of your employees for bodily injury or property damage, your business won't have to incur the financial losses that can occur with such a claim. Moreover, it prevents the claimant from going after the assets of your business, so long as the liability does not exceed the limits that are established in your policy.

Understanding The Difference

It is important to highlight the difference between additional insured vs certificate holder. If you are a certificate holder, you may be able to see that a company has insurance, the type of coverage the company has with their insurance, and any limits, but the document itself does not provide you with insurance coverage. It is simply a document that proves a business has an insurance policy in place.

If you are an additional insured, however, you are covered by the insurance coverage your company has. Additional insured on certificate of insurance, certificate holder vs additional interest, what does additional insured mean on a certificate of insurance, policyholder vs certificate holder, certificate of insurance additional insured sample, certificate holder insurance, additional insured endorsement, additional insured & acord form.

Additional Insured vs Certificate Holder - The Bottom Line

We hope this article on additional insured vs certificate holder was informative. It is important for both business owners and employees to understand the difference between being a certificate holder and being an additional insured. Oftentimes, employees assume that they are covered by a certificate of insurance simply because they are in possession of proof of the insurance, but unless they are an additional insured individual, they are not covered by the company's insurance policy. The only way to be covered by the policy is to be added as an additional insured.

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