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?
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.
No matter how good you and your employees are there is always the possibility that the worst can happen. If a customer becomes dissatisfied for any reason then they may decide to sue your business and whether you are wrong or right it can cost you a huge amount in legal fees.
Quite often a person will sue a business for unfounded reasons and even if you win the case you will be liable for legal fees in the region of $2000 to $5000. This can be serious money for a small business, and with business liability insurance you will receive assistance with these costs.
What about if your business makes a serious mistake? Serious cases can cost your business an absolute fortune can even be the difference between staying in business and going bust. Don’t take the chance of bankruptcy by facing a lawsuit that could cost hundreds of thousands of dollars.
When you have business liability insurance you will show your clients that you are professional and very serious about what you do. Clients may ask you if you have professional liability cover before they will sign a large contract with you.
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.
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.
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.
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.
