Holder v. Additional Insured
Certificate Holder v. Additional Insured - What is the Difference?
It’s amazing how few business owners "main contractor" know the distinction
between being a Certificate Holder on a vendor's or sub-contractor’s, the "Named
Insured" 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.
The "main contractor" is provided with
a certificate of insurance that shows that the sub-contractor or vendor, the
"Name Insured" does in fact maintain insurance and names the main
contractor as the "Certificate Holder." It is just a proof of insurance.
The main contractor is named as an “additional insured”
on the certificate of insurance and is actually given coverage, and has rights
under the sub-contractor’s or vendor's, the "Named Insured" policy
in the event of a future claim. Some carriers will charge the sub-contractor
or vendor a premium for this privilege because they are actually conferring
Certificate Holder is simply proof of insurance, where as
Additional Insured status gives the main contractor coverage and rights under
their sub-contractor's or vendor's, the "Name Insured" policy.