Certificate of Insurance

A certificate of insurance is a document usually requested by opposite parties in an agreement, contract or transaction to provide verification of insurance. The certificate will contain information on types and limits of coverage, the insurance company, policy number, named insured, and the policies’ effective period. A certificate cannot alter, change, or amend any insurance coverage that is currently in place.

Extra requirements on a certificate of insurance such as including numerous additional insured names or wording such as "all subsidiaries, affiliates, agents, and contractors" or "partners, members, officers, employees, or relatives" are unenforceable provisions. There always needs to be a recognizable relationship between the parties and the additional insureds.

Also, it is to note, removing "when required by written contract" on a certificate does not eliminate the requirement from the policy. For additional insured coverage to apply, there must be a written contract.  

Definitions:

  • Certificate Holder: The entity that is provided a certificate of insurance as evidence of the insurance maintained by another entity.
  • Additional Insured: The insured must request this extension. Adding an entity as an Additional Insured gives the entity some of the rights and privileges of an insured, including Defense and Indemnification: the insurance company will defend the entity and pay on their behalf for covered losses. An Additional Insured can be added via a "blanket" if there is a written contract or by an individual endorsement if there is no written contract. 
  • Primary and Non-Contributory: This term is commonly used in contract insurance requirements to stipulate the order in which multiple policies triggered by the same loss are to respond. For example, a contractor may be required to provide liability insurance that is primary and noncontributory. This means that the contractor's policy must pay before other applicable policies (primary) and without seeking contribution from other policies that also claim to be primary (noncontributory).
  • Subrogation: One party has the right to "step into the shoes" of another party for the purposes of bringing a claim for damages. 
  • Waiver of Subrogation: An agreement between two parties in which one party agrees to waive subrogation rights against another in the event of a loss.

Please be advised that coverage cannot be bound, modified or deleted without speaking to a NorthEast Insurance Services agent. For more information regarding certificates or to inquire about an issue with an existing certificate, contact Joe Syndennis at (732) 972-1771 ext. 1104.