What Is a Certificate of Insurance? Certificate Holder Is Not Additional Insured

A one page summary of somebody else's insurance policy, usually an ACORD 25, showing what cover they carry and when it expires. It is proof of insurance, not insurance, and the difference between the two boxes on it is the difference between being told and being covered.

What it is and what it is not

A certificate of insurance is issued by the insurance agent, not by the insurer's underwriting department, and it summarises a policy that exists somewhere else. It lists the named insured, the policy numbers, the types of cover, the limits and the expiry dates, on one page.

It is evidence. It is not a contract, it does not amend the policy, and it confers no rights by itself. Most certificates say so in small print near the bottom, in a disclaimer that almost nobody reads and that is the most legally significant sentence on the page.

So the certificate tells you a policy existed on the day the agent typed it. What cover you actually have under that policy is a separate question, answered by endorsements, not by the certificate.

Certificate holder is not additional insured

This is the single most expensive misunderstanding in contractor paperwork and it is caused by two boxes sitting on the same sheet of paper.

The certificate holder box is an address. It says who was sent this certificate, and in most cases who the insurer will try to notify if the policy is canceled. It gives you no cover at all. Being the certificate holder on your subcontractor's policy means you will be told when it lapses, and that is the whole of it.

Additional insured is a change to the policy itself, made by an endorsement. It extends the named insured's cover to you for liability arising out of their work. If your sub injures somebody and you get sued as the general, additional insured status is what puts their insurer in front of your policy. Certificate holder status does nothing in that situation.

The practical rule follows: if your contract requires additional insured status, do not accept a certificate as proof of it. Ask for the endorsement, which is a separate document with a form number on it.

What to check before you let anybody on site

Names first. The named insured on the certificate has to be the same legal entity that signed your subcontract. A certificate in the name of a sole trader when the contract is with a limited company is a certificate for a different party.

Then dates, because certificates are collected at the start of a relationship and jobs run past renewals. Then limits, against the figures your contract actually requires rather than against a general sense of what looks big enough. Then the specific endorsements your contract calls for.

Workers compensation deserves its own look. On most jobs it is the cover that decides whether an injured worker's claim lands on your policy, and an uninsured sub can put their crew on your experience rating.

Named insured matches the contracting party exactly.
Policy period covers the whole of your job, not just the start date.
General liability limits meet the contract, per occurrence and aggregate.
Additional insured endorsement attached, with its form number, if required.
Waiver of subrogation, if your contract requires one.
Workers compensation in force, or a valid exemption you have seen.

It expires, and that is the failure mode

Almost nobody collects a certificate late. Plenty of people collect one in March and let it lapse in September while the sub is still on site.

Put the expiry date in the same place you keep the contract and ask for the renewal a fortnight before it runs out. A lapsed certificate on a job that has an incident is the same position as no certificate, and the conversation with your own insurer is unpleasant in a way that is hard to overstate.

Asking is easier when you have a standing letter for it rather than composing a new email each time, which is what the request letter on this site is for.

The boxes on the certificate, in plain words

An ACORD 25 is dense and most of it is reference numbers. These are the parts that change what you have.

Insured: The party whose policy this is. Must match the entity on your contract, exactly.
Certificate holder: Who is being sent the certificate. An address, not a grant of cover. This is the box people mistake for protection.
Additional insured: A yes or no column against each policy line. Yes here still means ask for the endorsement, because the cover lives in the endorsement, not in the tick.
Policy effective and expiration: The window. Compare it to your schedule, not to today.
Limits: Each occurrence and general aggregate. The aggregate is shared across all their jobs, not reserved for yours.
Description of operations: Free text. Often where a project name or a subrogation waiver gets mentioned. Useful as a clue and not reliable as proof.

What it looks like

This is the blank form as this site actually prints it, drawn from the same file the download button gives you. It is not a picture of somebody else's document.

What to do with it

Subcontractor agreementWhere the insurance requirement belongs in writing.Independent contractor agreementFor the smaller engagements that still need cover.Construction daily logThe record of who was actually on site on the day.

Questions people ask

What does certificate holder mean on a certificate of insurance?

It means you are the party the certificate was issued to, and usually the party the insurer will attempt to notify if the policy is canceled. It does not make you an insured and it does not give you any cover under the policy. If you need cover, you need to be an additional insured by endorsement.

Is a certificate of insurance proof of coverage?

It is evidence that a policy existed when the certificate was issued. It is not the policy, it does not amend the policy, and the certificate itself usually says so. For anything that matters, ask for the endorsement or the policy declarations page rather than relying on the certificate alone.

Who pays for adding a general contractor as additional insured?

The subcontractor, whose policy it is, and in practice it is a small or nil charge on a commercial general liability policy. Because it costs the sub little and protects you a lot, it belongs in the subcontract as a requirement rather than being negotiated per job.

How often should I collect a certificate of insurance from subcontractors?

At the start of every engagement and again at every policy renewal while they are still working for you. Diary the expiry date when you file the certificate. The usual failure is not a missing certificate, it is one that quietly expired halfway through the job.