The Difference Between Policy Holder, Certificate Holder, & Additional Insured
In this video we will use the example of a construction project to explain the differences between three entities: policy holders, certificate holders, and additional insureds.
The policy holder is the person or entity who has purchased a policy from an insurance provider. The party is usually one of the named insureds on the policy. Upon request, a subcontractor, or vendor, will provide their client with a certificate of insurance to prove they are indeed policy holders and, therefore, have coverage in the event that bodily injury, property damage, or advertising or personal injury occurs throughout the course of a project. Policy coverage may also extend beyond the completion of a project.
Now, who is the certificate holder?
In this scenario the client then gains the title of certificate holder. By definition, becoming a certificate holder does not incur any policy given rights to that entity. Again, the certificate is simply a proof of insurance.
What about additional insureds?
An Additional Insured Endorsement is a provision made to a commercial general liability policy that effectively extends the subcontractor’s, or vendor’s, coverage to the client, in this case the general contractor, and other relevant parties like a lender, a joint venture partner, etc.
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