Are You a Certificate Holder? What Your Next Steps Should Be

COI Management | April 18, 2022

Being a certificate holder is the first step in tracking your contractors’ certificates of insurance. Knowing what a certificate holder is and how it impacts your organization is important when speaking with your contractors and their agents.

What is a Certificate Holder?

A certificate holder is when your organization is listed on a certificate of insurance or COI for an independent contractor or another company that you have a working relationship with. You typically request to be a certificate holder because you need to confirm that the company you are working with has insurance coverage. Whether that company is doing work on your behalf, providing a product that you will use or sell, or they are leasing your property, it is important to make sure that they are covered in case of an accident or faulty product.  

When you become a certificate holder, you will begin receiving notifications of policy changes, such as when the policy is renewed, changed, or canceled. It is worth noting that it does not guarantee that you will be contacted but you are more likely to receive notices. 

Certificate Holder Is Not an Additional Insured

Many will confuse a certificate holder with an additional insured. It is important to note that a certificate holder is not provided any coverage or right to the contractor’s policy, they will simply receive notices for the policy. Whereas an additional insured alters coverage and allows you to file a claim on the policy if the company has an accident. It is very common to request both.

How to Become a Certificate Holder

If you wish to become a certificate holder, you can contact either the company or if you know their insurance agent, you can ask them directly if it is a commercial or business policy. Some companies do not have an insurance agent who brokers insurance or negotiates insurance between the contractor and the insurance carrier. In this case, you can request it from the carrier. 

When requesting to be a certificate holder, be sure that you provide your organization’s name that is in your contract or agreement with your contractor. This will save confusion if you are also requesting to be an additional insured or other requests that alter the policy. Sometimes the name that your organization does business as is different than the name listed in the agreement. 

Make sure that you provide a mailing address that is being actively monitored for mail. Many insurance carriers still mail notices of cancellation for policies and additional insured status and you want to make sure that you receive them at the correct location. 

Actively Manage Cancellations & Renewals

The value of being a certificate holder is that you are more likely to receive notices when a policy changes or is canceled. To take advantage of that, you will want to monitor the mail for those cancellations and actively work them. Be sure the company knows you received a notice and to submit proof of a reinstated policy. 

Renewal of a policy is usually received via email with a COI showing basic policy details and insurance agents typically store your email address. You will most likely receive the COI going forward once you are a certificate holder. However, to ensure there is not a gap in coverage, you will want to actively request a certificate of insurance prior to expiration to guarantee that the policies are still active and received in a timely manner.   

Ensuring that you are a certificate holder and actively monitoring both the cancellations and renewals is one piece to a comprehensive and robust insurance tracking program that will reduce your financial risk and confirm that if a contractor has an accident, they are covered and have the ability to pay for damages. 

Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel with respect to their obligations and use of PlusOne Solutions services.

About PlusOne Solutions

PlusOne Solutions has been an industry leader in the risk management field by specializing in compliance programs that meet the complex challenges of geographically dispersed contractors, vendors, and employee networks. PlusOne Solutions protects companies from possible financial, legal, and reputational risks associated with contractor and vendor relationships while creating safer work environments. To learn more, visit https://www.PlusOneSolutions.net.