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Named insured, certificates of insurance, additional insured and additional named insured: What’s the difference?

The answer is; quite a bit. These insurance terms can cause quite a bit of confusion when the need arises to request one or the other. To help clarify the differences between them, the following definitions are provided from The Glossary of Insurance and Risk Management Terms.

  • Named insured

    Is any person, firm, or organization, or any of its members specifically designated by name as an insured(s) in an insurance policy, as distinguished from others who, although unnamed, fall within the policy definition of an “insured”. This is the entity with whom the contract of insurance is made. If you have an insurance policy with Markel, you are probably the named insured.

  • Certificate of insurance

    This is a document providing evidence that certain general types of insurance coverages and limits have been purchased by the party required to furnish the certificate. (An important point of reference for this document involves the limits of insurance being provided. If you request a Certificate of Insurance from someone you do business with, be sure to check their limits of insurance. It is highly recommended that they have limits of insurance equal to or greater than what you currently have on your policy.) One other very important note regarding a Certificate of Insurance – A certificate of insurance is issued as a matter of information only and confers no rights upon the certificate holder. A certificate of insurance does not affirmatively or negatively amend, extend or alter the coverage afforded by the policies issued. A certificate of insurance does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder.

  • Additional insured

    A person or organization not automatically included as an insured under an insurance policy, but for whom insured status is arranged, usually by endorsement. A named insured’s impetus for providing additional insured status to others may be a desire to protect the other party because of a close relationship with that party or to comply with a contractual agreement requiring the named insured to do so.

  • Additional named insured

    • This is a person or organization, other than the first named insured, identified as an insured in the policy declarations or an addendum to the policy declarations.
    • A person or organization added to a policy after the policy is written with the status of named insured. This entity would have the same rights and responsibilities as an entity named as an insured in the policy declarations (other than those rights and responsibilities reserved to the first named insured). In this sense, the term can be contrasted with additional insured, a person or organization added to a policy as an insured but not as a named insured. The term has not acquired a uniformly agreed upon meaning within the insurance industry, and use of the term in the two different senses defined above often produces confusion in requests for additional insured status between contracting parties.

If you are asked to provide a “Certificate of Insurance” or you are being requested to add an additional party to your insurance as an “Additional Named Insured”; it is further recommended that you have a detailed discussion with your insurance agent before you agree to either so all parties involved understand what is being expected of you.

Resources: International Risk Management Institute, Inc.  Glossary of Insurance and Risk Management Terms. Sixth Edition. Dallas, TX.