What is an insurance certificate holder? Often, the terms included in an insurance certificate can get confusing. You may not be familiar with this unless you are working in accounting or the purchasing department. Or perhaps, you are overseeing contractors or managing promotional events.
Regardless, in an insurance certificate, the insurance policy of a person or company is summarized. It also included the coverage amounts as well as any limitations associated with this policy. Not only that, but it also includes the insured’s name, coverage period, and any other related information.
In some cases, it is listed in the certificate holder’s name, and it is further indicated in the document if the certificate holder is also insured under the insurance policy.
What Certificate Holder Of Insurance Is
What is an insurance certificate holder? If you add a client to the insurance certificate, their name is automatically included on the box for the certificate holder. Being the insurance certificate holder does not mean that the client has rights to the insurance policy. However, the insurance provider will inform that person if there are some changes in the policy.
In other words, adding clients to the insurance certificate is only a formality. It is just used to let the client know that you are insured and have protection to do a particular job for him.
3 Important Terms Associated With Insurance
Since you ask: what is insurance certificate holder, let us likewise know some other important terms associated with insurance. Below are some of the most common and important worth noting.
#1. Insurance certificate holder
When we say a certificate holder of an insurance policy, it simply pertains to the party to whom the insurance certificate was issued upon the application. It is a particular place in an insurance certificate form in which the address and name of the certificate holder are indicated.
If you are working in a company hiring outside businesses for particular services like landscaping and janitorial, for example, the company requires proof from those businesses that they have insurance.
Unless the vendor can provide the hiring company an insurance certificate listing itself as the certificate holder otherwise, the vendor will most likely not get the contract. That is how important insurance certificates are, especially in business.
#2. Insurance certificate
All businesses enter into insurance coverage to protect themselves against risks and liabilities that may arise in their operations. For instance, if a contractor is hired to construct something, the business has to ensure that the contractor is insured in case of an accident on the site.
The insurance certificate is important since the hiring company would usually require this as proof. So essentially, an insurance certificate is proof that the business or individual has insurance coverage.
#3. Additionally insured
In case you are working in a company that is listed on the insurance certificate as additionally insured. It simply means that the company is enjoying the protection under the policy of the vendor. If there is a claim, and the company will cover the entity listed as additionally insured.
For example, if you have an auto insurance policy and your friend, sibling, or friend is listed under it, they will enjoy similar coverage. It is because they will be listed as additionally insured in your policy.
This one works the same way as those subcontractors or vendors that list their hiring company as additionally insured. However, if the company is listed as the certificate holder and not as additionally insured, it will not be covered under the insurance policy of the vendor or subcontractor.
Importance of Insurance Certificate For Events
Before a promotional event, the insurance certificate must be prepared first by the insurance company. Let’s say, for example, that art shows you see in the mall or any other promotional events would need to have an insurance certificate to show to the management team or the owner of the mall.
It will often name the mall owner as of the additionally insured under the policy. In case of an accident during the promotional event and someone got injured, the insurance will offer protection to the mall and the sponsor of the event.
To illustrate which you most likely need an insurance certificate, here is one example. It is common among many people who rent in an apartment. Therefore, it is most likely that the landlord will require you to have renter insurance. That is especially true if you own a dog.
You will need to provide insurance proof to the landlord. Upon your request to the insurance carrier, the landlord will be listed as the certificate holder of the policy.
Not unless it is required that you enlist them as additionally insured do that they will be likewise protected. But take note that if you add another person as additionally insured into your insurance policy, it is most likely that the insurance company will raise the premium. That is the importance of insurance certificates for an event.
It’s A Wrap!
Again, what is an insurance certificate holder? Now, you know that is it is the entity to whom the insurance is provided as evidence that the other party is insured. The name of the certificate holder will appear in the insurance certificate. Thi topic on how to find out your insurance policy number might help you later.