What to Check if You’re Not Sure if You’re the Certificate Holder

March 22, 2021

Business owners should invest the effort into purchasing appropriate liability insurance coverage. Having the right kind and amount of insurance can significantly reduce losses should they be sued for negligence. If they hire third parties, then they must confirm that those people own suitable policies.

Proof of insurance is just as important as the coverage itself. A certificate of liability insurance proves that a contractor, vendor, or other third-party hire is appropriately protected against potential risks. A certificate of insurance for business can help mitigate any financial damages should a claim occur by proving the third party is adequately covered.

A certificate of insurance (COI) is issued by insurance agents and brokers to the policyholders. COIs are then handed to companies that hire the policyholders as third-party employees. Despite appearing like a basic concept to grasp, some nuances can complicate and distract from the core meaning of the process.

  • What does certificate holder mean?
  • Who is the certificate holder on a COI?

These two questions can be a bit misleading. Fortunately, they can be easily answered.

What is a Certificate Holder for Insurance?

A certificate holder insurance meaning is fairly simple to understand.

A certificate holder is a person, business, or other entity that receives a certificate of

insurance. Keep in mind that a COI is proof of coverage. The insured third party who is hired by a company will provide this proof in the form of a COI. The third party is not the certificate holder despite them owning the policy and technically possessing the COI until handing it over.

Who Should be Listed as Certificate Holder on a COI?

Now that you know the answer to “what is a certificate holder for insurance,” you might be faced with another question: who should be listed as certificate holder on a certificate of insurance?

The certificate holder is the party who requires the certificate of insurance. If you’re hiring someone and you request the COI, then you’re the certificate holder.

This checklist should help you determine whether or not you’re the holder:

  • Did you hire a third party? If you did, then continue to the next bullet point.
  • Do you require proof of insurance? If you do, then continue to the next bullet point. If you don’t, you should check your state’s statutes to ensure you comply with the law.
  • Did the third party give you a COI? If they did, then continue to the next bullet point. If they did not, then you should ask them to submit one.
  • Is your name on the COI as the certificate holder? If it is, then you are the certificate holder. If it is not and you still require proof of insurance from the third party you hired, then you should request an updated COI.

If your third party hasn’t provided a COI, then you should ask for one. A physical letter can yield a paper trail that could be beneficial should the third party stall or claim they were not aware of a request.

A request for certificate of insurance sample letter can be found online. You can use this to officially document your request to the third party to provide you with a COI.

What Happens if I’m not Certificate Holder and I Should Be?

If you’re supposed to be the certificate holder and your name, or company’s name, is not listed on the COI, then the policyholder should contact their insurance agent to correct the oversight. Some issuers allow their policyholders to make such requests online. You can also urge the third party to call or email their insurance agent regarding how to add certificate holder to insurance information.

Certificate Holder vs. Policyholder vs. Additional Insured

Knowing what is a certificate holder on insurance as opposed to who the policyholder is can clear any misunderstanding between the two ideas. The certificate holder is the party who holds the COI. The policyholder is the party who owns the policy.

Complicating matters a little is the issue of the certificate holder also being listed as an additional insured. Any entity that benefits from a policy’s coverage is an additional insured. When the certificate holder is an additional insured, this is designated on the certificate of insurance.

The following list sums up the important takeaways that can help you and anyone else who finds themselves lost amid the intricacies of insurance compliance:

  • Certificate of insurance (COI): proof of coverage.
  • Certificate holder: the company or person who requests and holds a COI.
  • Policyholder: the insured party.

Additional insured: a party other than the policyholder who benefits from coverage. This party can be the certificate holder.

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