A Certificate of Insurance is evidence of coverage – it does not modify or change the coverages provided by your insurance policy. You may have signed contracts, leases or other agreements requiring you to provide this evidence. In those agreements, you may assume obligations or liability for others. Some of these obligations are not covered by insurance. You should review these with competent legal counsel.
What is an Additional Insured?
In addition to providing a Certificate of Insurance, you may be required to “name” your client or customer on your policy as an “Additional Insured”. This is possible only with permission of the insurance company and, in some cases, an additional premium will apply. When you ask for this there are other consequences to your policy including:
• Your policy limits are now shared with other entities; their claims involvement may reduce or exhaust your aggregate limit of protection.
• Your policy may provide higher limits than required by contract; your full limits can be exposed to the Additional Insured parties.
• There may be conflicts in defense when your insurer has to defend both you and the party you’ve had them add as an Additional Insured.
Loss Payee: Loss Payee applies solely to Property Insurance. Basically, who is the Loss going to be payable to? In order to protect their interest in the equipment, Rental Houses, and Lenders will ask to be named as Loss Payee on your policy; so that if a loss occurs, they will be paid for the equipment they have provided you.
Additional Insured: The term Additional Insured applies solely to Liability Insurance. General Liability, Automobile Liability, Umbrella Liability, or Employer’s Liability (Worker’s Compensation.) NOTE: One cannot name someone as an Additional Insured unless there is a Liability policy in effect. When you do name someone as Additional Insured, you are essentially adding them as an additionally insured person on your policy. If there is a claim involving bodily injury or property damage, and the suit names both your company, and “their” company; your policy could be triggered to respond on “their” behalf, because you have authorized your carrier to name them as Additional Insured on your policy. Since this coverage could essentially extend or expand your insurance coverage, the Insurance Company typically charges an additional premium of as little as $250.00 and as much as 10% of the policy premium, for this endorsement. If available, it is often less costly to purchase an annual “Blanket Additional Insured” Endorsement in the beginning of the policy term.
Vehicle Rental: In order to insure vehicles that you rent, (i.e.: Light Trucks, etc.), you must have Hired Automobile Insurance. There are two parts to this Coverage: Auto Liability and Auto Physical Damage (Comprehensive and Collision). Hired Auto Liability protects the rented vehicle from Liability while the vehicle is being driven. Physical Damage coverage is typically limited to a maximum value per vehicle (i.e.: $50,000, etc.) and limited to a maximum per accident, see the policy for the maximums that apply. Deductibles for Comp and Collision also apply, see the policy for Deductibles.
Worker’s Compensation: Proof of Worker’s Compensation coverage is typically a requirement. United Western Insurance Brokers can usually assist with this coverage.