The terms Certificate Holder and Additional Insured are commonly used in commercial insurance policies in Georgia and South Carolina, especially in industries such as construction and contracting. Understanding the difference between these two is essential to meet contract requirements and avoid coverage issues in the event of a claim.
A common situation occurs when a General Contractor requires a subcontractor to provide a Certificate of Insurance (COI) and to be listed as an Additional Insured on the subcontractor’s General Liability policy. While these terms are often requested together, they do not provide the same level of protection.
What Is a Certificate Holder?
A Certificate Holder is the individual or entity that receives a Certificate of Insurance (COI). This document is issued by the insured’s insurance agent or carrier and serves as proof that an active insurance policy exists at the time the certificate is issued.
For example, when a subcontractor provides a COI to a General Contractor, the General Contractor is listed as the Certificate Holder. This does not grant coverage or rights under the policy. The certificate simply displays general information such as coverage types, limits, and policy dates, but it does not change or extend the policy.
In short, a Certificate Holder is only evidence of insurance, not an insured party.
What Is an Additional Insured?
An Additional Insured is a person or entity that has been officially added to the policy through an endorsement. This endorsement extends coverage from the insured’s policy to protect the Additional Insured, typically for claims arising from the insured’s operations or work.
When listed as an Additional Insured, the entity gains protection under the policy if a lawsuit occurs related to the subcontractor’s work. This is why General Contractors frequently require subcontractors to add them as Additional Insureds.
Unlike a Certificate Holder, an Additional Insured does receive coverage, subject to the policy’s terms, conditions, and limits.
Why Does This Difference Matter?
Understanding the difference between Certificate Holder and Additional Insured helps ensure contract compliance, prevents misunderstandings, and provides proper protection against liability claims. Many disputes arise when a party assumes coverage exists simply because they are listed as a Certificate Holder.
At Calidad Insurance, we have extensive experience helping businesses and contractors in Georgia and South Carolina structure their commercial insurance correctly. Contact us if you have questions about your current coverage or need insurance for your business.
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