Ask ERIE: What’s the Difference Between a Certificate of Insurance and an Additional Insured?

You typically bump into these problems once you’re talking regarding business insurance. It’s simple to urge them confused.
The key distinction between a certificate of insurance and a further insured comes right down to whether or not you've got coverageunderneath somebody else’s contract. This solely applies if you’re named as a further insured on a policy.
What’s a further insured?
When you’re named a further insured on a policy, you're generally insured for coated claims arising from the Named Insured’s negligence (or your joint negligence) with relevance the premises, project and instrumentation that’s represented within the extrainsured endorsement. This ordinarily can embrace defense prices do you have to ought to rent associate degree professional if the claim falls among the terms of the extra insured endorsement.
Businesses generally request to be named as a further insured on a policy if another business’s negligence may have an effect onthem. 2 examples may include:
A general contractor hires a contractor to assist with a project. The contractor will negligent work, that leads somebody to urgeinjured and file a legal proceeding against each the final contractor and also the contractor. By being named a further insured on the subcontractor’s policy, the final contractor might get coverage underneath the subcontractor’s policy among the policy’s limits.
A wholesaler-distributor distributes product factory-made by another company. A product injures somebody, and also the injuredperson files a legal proceeding against the wholesaler-distributer and also the manufacturer. By being named a further insured on the manufacturer’s policy, the wholesaler-distributer might get coverage underneath the manufacturer’s policy among the policy’s limits.
A business is typically supplemental as a further insured via associate degree endorsement to a business contract. severalcontracts spell out United Nations agency ought to be named as a further insured on a business’ policy.
There ar 2 ways in which most policies treat extra insureds: on a selected basis and on a blanket basis. a selected basis is simply that—a specific person or business is called as a further insured on a policy.
Meanwhile, a blanket basis covers anyone United Nations agency meets the definition of “additional insured” as it’s spelled move intothe policy. The policy generally names broad varieties of parties like “contractors” or “landlords.”
What is a certificate of insurance?
A certificate of insurance may be a document that shows that sum of money is in result. It shows the dates of coverage, the limits, and also the line of business that’s coated.
The certificate shows that a policy is in force—but that doesn’t mean the person or business requesting it's coated additionally. As a certificate holder, you're solely receiving proof that the contract exists; the certificate of insurance isn't associate degree contractassociate degreed doesn't give coverage or serve to amend or alter the terms of an contract. 
A certificate of insurance is typically requested by one party in associate degree agreement, contract or dealings to form positiveanother party has the acceptable sum of money. A certificate of insurance doesn't entitle you to rights as a further insured. for instance, you aren’t provided any coverage underneath the opposite party’s policy within the event of a loss, unless the policy has been supported to produce coverage. For that reason, the simplest thanks to verify that you just are supplemental to a policy as a further insured is to request proof that the extra insured endorsement has been supplemental to the contract. If the policy has beensupported with the extra insured type, the certificate can usually embrace the shape variety and specific data regarding the endorsement that reflects what has been supplemental to the policy. Proof might so be a certificate with this data listed or associate degree actual copy of the declarations showing the endorsement. 
As you'll see, extra insureds and certificates of insurance may be pretty tough. And not having the proper data will place you (as well as your business) at monetary risk. That’s why it’s therefore necessary to own associate degree insurance skilled like associate degree Erie agent in your corner. associate degree Erie agent in your community will assist you be of those problems andadditional.