Insurance Certificate Holder  can be confusing and, in some cases, lead to costly mistakes. One of the most common errors is believing that being listed as a Certificate Holder on a vendor’s COI provides the same protections as being named an Additional Insured. This misconception can result in legal and financial implications for businesses that are not diligent about tracking COIs and confirming they have the proper third-party insurance coverage.

A Certificate of Insurance (COI) is proof that an insured has business insurance. Many companies request COIs from contractors, vendors, or partners to ensure that they have adequate business insurance before entering into transactions or agreements. Being listed as a COI does not confer any rights or coverage, but simply acts as proof that an insured has business insurance in place at the time of the request.

Shippers, brokers and carriers often request COIs from downstream service providers such as truckers or warehouses. While this is a good practice to help mitigate risk, it is important that those parties understand the difference between being named as a Certificate Holder and an Additional Insured. Being a Certificate Holder means being listed in a specific area on the COI, usually in the designated Certificate Holder box. Generally, Certificate holders do not receive any benefit or defense under the insured’s policy and are only guaranteed notification that the insured has canceled their policy. Being named an Additional Insured, on the other hand, confers both coverage and a defense under the insured’s policy.