Who is The Certificate Holder on a COI?

August 3, 2023

When businesses want to make sure their vendors and partners have the right insurance coverage, they ask for a Certificate of Insurance (COI). It’s a way to protect themselves from any potential claims. But what does the COI actually say?

Let’s break it down. Here are the main terms you’ll find on a COI and what they mean. It’s important to understand them to stay on the right side of the law.

Policy Holder

The policy holder on a COI is the person or entity whose name is primary on the insurance coverage. It is the person who has purchased the coverage from an insurance company, pays for the premiums, and would receive the benefits should a claim ever be filed.

At times, you may see the policy holder listed as the named insured. The policy holder won’t be held liable for any damage or loss that is beyond the amount that is listed on the insurance policy, also known as its coverage limits.

Certificate Holder

A certificate holder is the business or person who receives the COI from the policy holder. The insured — or their insurance company — will provide the COI to the certificate holder as a way to prove they have sufficient insurance coverage for the job.

The certificate holder doesn’t hold any actual power over the policy itself, or have the ability to file a claim against the policy. It’s just the person or entity who requested to see proof of insurance.

When requesting a COI, the certificate holder needs to be listed as the exact entity name. It cannot, for instance, be a “doing-business-as” name, or DBA, as that’s not the legal name of the company.

Who Counts as a Certificate Holder for General Liability Insurance?

On general liability insurance, the person or entity that has requested and received a COI will count as a certificate holder. For a particular project or job, there could be multiple certificate holders if there are multiple entities that have insurance requirements.

How Much Does an Additional Insured Endorsement Cost?

How much it costs to put an additional insured endorsement on a policy will depend on the insurance company. Some insurance companies charge $50 for this service, while others will charge more.

Businesses that often have to add additional insured endorsements to their policies may also have the option of paying a flat fee to add an unlimited number of additional insureds to their policy.

Sample COI with Additional Insured

A COI will list the insurance company’s name and address, as well as that of the policy holder, at the top. Typically, it will then be followed by the description of each policy requested, including the policy number, the policy period, and the coverage amounts.

Below that will be listed the additional insureds, with the certificate holder at the bottom.

You can find a sample COI with additional insured listed online through a simple Google search. This can serve as a prime example for you to compare the COI that you request.

Certificate of Insurance Explained

A certificate of insurance is a document that shows the insurance policies that an entity has. It is most often requested by a business before they enter into a contract arrangement with another entity. 

It helps to protect them from potential insurance claims that could result from negligence or other incidents caused by contractors or sub-contractors.

How Much Does a Certificate of Liability Insurance Cost?

A Certificate of Liability Insurance typically will be provided for free. That’s because it’s just a document that proves what insurance coverage a party has.

Coverage Types and Information

A COI can be requested for any type of insurance policy. Most commonly, they will be requested for general liability insurance, since that is the policy that provides the widest “swath” of coverage for business entities.

That being said, COIs can also be requested for workers’ compensation and commercial auto policies, and many more.

What Information is Included on the Certificate of Insurance?

Each COI might have slightly different information on it. However, at the very least, the COI should include …

  • Name and mailing address of the insurance company
  • Name and mailing address of the policy holder
  • Types of insurance policies
  • Effective dates of the policies
  • Coverage limits of the policies
  • Any additional insureds listed on the policy
  • Name and mailing address of the certificate holder

COIs are a great way for businesses to improve their all-around risk management. It allows the company to avoid potentially expensive litigation costs if someone is injured on your property due to the negligence of a contractor or sub-contractor, for example.

Some businesses may prefer to use “For Information Only” certificates. These documents will have no certificate holder listed and allows the business to hand them out to multiple entities.

These don’t work for the certificate holder, though, as it could create unnecessary liability in the case of an insurance claim. It could also result in a penalty during insurance audits.

Additional Insured Endorsements

An additional insured endorsement lists anyone aside from the policy holder who is covered under that particular insurance policy. There is typically a time period for which this coverage extends for the additional insured, though there doesn’t have to be. For instance, an additional insured may apply to a sub-contractor for the length of a particular job. 

If you need to add additional insured endorsements to your policy, it’s a good idea to purchase a blanket policy. That’s because it’ll provide the most coverage for those entities.

Waiver of Subrogation Endorsement

A waiver of subrogation endorsement is the language that’s added to an insurance policy that prevents a policy holder from trying to recover any money they’re forced to pay out due to a third-party’s negligence. It essentially protects all parties from the beginning and helps to avoid lengthy and costly litigation that could arise.

One other thing to keep in mind is that if you are switching insurance companies, you want to make sure that the new company you’re going with has the ability to comply with your COI requirements. If they can’t, then it’s probably best to go with a different company.

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