But I thought I was an additional insured.

We are kicking off our “But I thought…” insurance pitfall series!

But I thought I was an additional insured

We’re all familiar with the panic that emerges when you first receive a lawsuit.  But you’re not worried; you procured a certificate of insurance (“COI”) from the subcontractor, naming you as an additional insured.  It was their employee who caused the accident – their policy should cover you, right? 

You confidently submit the claim to the subcontractor’s insurance company, highlighting the Certificate Holder section that proudly displays your name and the Description section that notes you are also an additional insured. 

If only securing additional insured status were so easy.  Brokers, claims professional, and even risk professional often fail to read the very first sentence on the top of the COI: “This certificate is issued as a matter of information only and confers no rights upon the certificate holder…”

So, a few weeks later, you receive a denial letter.  The subcontractor’s broker may have typed your name onto the COI, but nobody ever added you to the actual policy!  Now the real panic sets in.

For risk transfer purposes, the COI is literally a worthless piece of paper.  In fact, the information is so unreliable that the very next day, even the subcontractor themselves may not have coverage!

Next time, don’t rely on someone else. Instead do this:

1. Shred that COI (not really… just file it away)
2. Take a deep dive into your contract
3. Get a copy of their policy
4. Most importantly: call Tivra! We’ll do the heavy lifting and make sure you’re fully protected.

#claims #riskmanagement #contracts #litigation #insurance #risktransfer