What Is Additional Insured on a COI?

When entering into various transactions and agreements, parties often seek assurances regarding potential liabilities. Understanding the documentation that verifies financial protections is important for both individuals and businesses. This documentation helps establish clear responsibilities and safeguards in third-party relationships.

The Certificate of Insurance Explained

A Certificate of Insurance (COI) serves as a concise summary of an insurance policy, providing proof of coverage at a glance. Its primary purpose is to quickly verify that an individual or entity holds specific types and amounts of insurance. This document offers essential details without requiring a review of the entire insurance policy.

A COI includes information about the named insured, their address, and insurer details. It specifies the policy number, types of coverage (e.g., general liability, commercial auto, workers’ compensation), and policy limits. The document also states the effective and expiration dates of the coverage.

A COI is not the actual insurance policy; it functions as evidence that a policy exists. Full terms, conditions, and exclusions are detailed only within the complete insurance policy document. Insurance agents or brokers commonly issue COIs, though the insurance company can also provide them directly.

Parties often request a COI to confirm a vendor, contractor, or business partner has adequate insurance before entering an agreement. This helps mitigate risks by ensuring financial protections are in place. Reviewing a COI confirms necessary coverages, offering assurance of another party’s financial responsibility.

Understanding Additional Insured Status

An “Additional Insured” is a person or entity, other than the primary policyholder, granted coverage under an existing insurance policy. This status extends certain protections to the added party, allowing them to receive benefits from the policy under specific circumstances. The inclusion of an additional insured is formalized through an endorsement to the original insurance contract.

Additional insured status is often requested in contractual relationships where one party seeks protection from liability stemming from another’s actions. For instance, a property owner hiring a contractor might require being named as an additional insured on the contractor’s general liability policy. This shields the property owner if a claim arises from the contractor’s work, such as an injury at the job site.

Coverage for an additional insured is limited to claims arising from the named insured’s negligence or ongoing operations. It does not extend to covering the additional insured’s own independent negligence or activities unrelated to the named insured’s work. Protection is tied to risks associated with the named insured’s performance under the contract.

Distinguishing an additional insured from other roles is important for clarity regarding coverage responsibilities. The “Named Insured” is the primary policyholder who purchased the insurance and has full rights and responsibilities under the policy. An additional insured has limited rights and coverage derivative of the named insured’s policy. This differs from a “Loss Payee,” who has an interest in specific property and receives payment for covered losses to that property.

How Additional Insured Status Is Documented

Formalizing additional insured status requires an amendment to the insurance policy, known as an endorsement. Being listed on a Certificate of Insurance (COI) does not automatically grant additional insured status; the COI only serves as evidence that an endorsement has been added. The endorsement is the legal document that modifies the policy to include the new party.

Additional insured status is indicated on a COI in a designated section, often labeled “Description of Operations/Locations/Vehicles” or an “Additional Insured” box. This section lists the additional insured party’s name and may reference the endorsement form number attached to the policy. This signals that the policy has been modified to extend coverage to the named entity.

It is important to review the actual policy endorsement, rather than relying solely on the COI, to understand the precise terms and limitations of additional insured coverage. The endorsement details the scope of coverage, exclusions, and conditions under which the additional insured is protected. The COI is a summary; the endorsement provides the full legal context.

Additional insured endorsements can be structured in various ways, such as “scheduled,” where each additional insured is named, or “blanket,” extending coverage to any party requiring additional insured status by contract. While the COI might reference these types, confirming status involves verifying the endorsement form number on the COI matches the actual endorsement on the policy.