Difference Between Certificate Holder and Additionally Insured

Edited by Diffzy | Updated on: April 30, 2023


Difference Between Certificate Holder and Additionally Insured

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A regular occurrence is a financial loss as a result of an unknown risk. This has prompted the use of risk-mitigation strategies, generally referred to as insurance. This is a process in which the insurer receives a risk guarantee in the form of cash from the insured in exchange for a promise to compensate if the covered failure comes. Following that, a contract is provided, including the arrangement's terms and conditions. A certificate holder and an additional insured document, for instance, may be issued.

A certificate holder is documentation that proves insurance ownership. An additional insured, on the other hand, is a document that grants rights under an insurance policy on the occasion of a future claim.

The holder of a certificate is not permitted to file a claim under the policy. An additional insured, on the other hand, have rights under the policy and is thus entitled to file a claim.

A certificate holder has the right to be notified or receive messages if the policyholder changes or cancels the policy, but is not authorized to claim the plan. An additional insured, on the other hand, have rights under the policy and is thus entitled to file claims. Any policy alterations, on the other hand, are not communicated to the policyholder.

Certificate folder vs. Additionally insured

A certificate holder is a document that gives rights underneath an insurance policy in the event of a future claim, while an additional insured is a document that offers rights underneath an insurance plan in the occasion of a future claim. A contractor or a client can both be a certificate holder and an additional insured, it should be emphasized. This ensures that they have all of the rights, as they will be covered by the policy and will be informed of any policy changes or cancellations.

The client then assumes the role of the certificate holder in this scenario. By definition, becoming a certificate holder does not confer any policy-granted rights on that company. The certificate is merely confirmation of insurance once more. (In our construction contract example, the certificate-holding subcontractor is not covered by the policyholder's insurance against claims for property damage, personal injury, and so on.

The inclusion of contracting parties as additional insureds to another's insurance policy is fraught with ambiguity. Insurers, who seek to limit the scope of coverage under their issued policies, and policyholders, who want coverage for all probable risk factors affecting their unique business, are constantly at odds. Policyholders also want to make sure that all parties involved in a project are covered.

An additional insured endorsement is a clause in a Commercial General Liability (CGL) policy that effectively extends the coverage of a subcontractor or vendor to the client, including the general contractor, real estate owner, hotel management company, and other relevant parties such as the lender, joint-venture partner, and so on.

Let's review the key distinctions between a certificate holder and an Additional Insured. An Additional Insured is a person or entity that is covered by your policy and so has the right to file a claim. Adding Additional Insureds may incur a modest fee from some insurers. An Additional Insured, on the other hand, is not always notified when a policy is modified.

On either hand, when a policy is altered, such as when it is canceled or renewed, an entity is notified. A certificate holder, on the other hand, is not covered by your policy and thus can file a claim. As a result, there is no additional charge for adding a certificate holder.

 Let's look at an example to better understand the difference between an Additional Insured and a certificate holder: A gym owner may ask that the cleaning business they engage add the gym to their general liability insurance as an Additional Insured. If a customer falls on a freshly mopped floor and sues the gym for medical bills, the gym may be able to file a claim under the cleaning company's insurance policy.

If the gym took out a bank loan to pay for its pricey workout equipment, the bank may demand a COI naming them as a certificate holder so they can be informed if the gym's insurance policy is modified or revoked.

Knowing who the policy covers are the first step in understanding insurance. It is easier to evaluate risk liability by distinguishing between these three terms.

Insurance policyholder

The insurer of the insurance contract and the direct beneficiary of the coverage is known as the insurance policyholder. Also referred to as "Named Insured." The policyholder, for example, maybe charged a price for personal injury, property damage, advertisement, or personal injury resulting from project work.

Certificate Holder

Insurance certificates are issued by policyholders' agents to the company or entity that hired the listed insured to execute the task. It could be a subcontractor who delivers COI to the principal contractor, for example. The principal contractor is specified as the certificate holder in the insurance policy, which means he receives the document. At present time, the COI serves only as proof of insurance. It gives general information on the policyholder's coverage but makes no changes to the policy.

COI should be regularly reviewed since policyholders can cancel or reduce coverage at any moment. The holder of the certificate would never know whether the insurance cover still exists until they demanded a renewal of the COI.

Additional insured

Contracts frequently compel policyholders to extend their insurance coverage to other organizations in the construction industry. Any part that is covered by this policy is ensured. The subcontractor might add his principal contractor as an Additional Insured to his policy. Both portions are covered by the same policy or have the same coverage. The certificate of insurance will specify if the certificate owner is an additional insured.

Difference between the certificate holder and additionally insured in tabular form

Parameters of Comparison Certificate holder Additionally insured
Definition An insurance policy's ownership is specified in this document. This paper outlines a man's privacy under an insurance policy.
claim This document can be used to submit a claim.


This document does not allow for the submission of a claim.
Rights A person has the right to be informed of policy changes Everyone doesn't need to be aware of the policy changes.
Information The name of the entity must be stated.


Information such as the language's current condition and the entity's name should be included.
Uses In terms of insurance, this document is more important. In terms of insurance, this document is less essential.

What is a Certificate holder?

A certificate holder is documentation that demonstrates that a person is the owner of a specific insurance policy. This serves as verification of an insurance policy's authenticity. A person in charge of this documentation has full access to information on any changes to the policyholder's insurance policy or termination by the policyholder.

In this case, that person gains the authority of the policyholder, which results in that new extended status of the certificate holder. By definition, the term "certificate holder" does not confer any form of entitlement on a person to incur any kind of insurance offered by that company.

A certificate holder is essentially a document that serves as proof that an insurance policy is genuine. When it comes to issuing a certificate holder in the name of the entity that gave it, it is usual for a policyholder to choose a contractor. This document also contains information about the holder's personal information as well as terms and conditions.

A certificate's principal use is to certify your insurance coverage. A copy of your COI will be sent to the certificate holder, as well as notices when your coverage expires, renew, changes, or is canceled.

A certificate holder can be an individual or a company with a stake in your success. Consider the following scenario: you own a photographic studio and need to lease rooms. Your landlord may wish to be listed as a certificate holder on your commercial real estate insurance policy after you sign a lease to ensure that you are covered during the term of your lease. This supplies the landlord with peace of mind if you damage the property you are renting.

What is Additionally insured?

The additional insured is documentation that insures against any unknown future danger that could result in any type of damage. Because of this insurance, an additional insured has entire rights to be legally permitted to claim it. Any changes to the policy do not need to be communicated to the policyholder.

Additional insureds are people who choose to join the insured policy and are referred to as extra insureds. There is always a disagreement between those who wish to limit the extent of an agreement and those who want to increase the reach of the document's limits, such as a policyholder.

The additional insured is simply a document that serves as a broad commercial liability provision. It aids in expanding the range and coverage of the vendor's services to his client.  Also, it extended the scope of adding an actual insured document to other parties who are related to the policyholder in any way.

An Additional Insured is a person or entity that the policyholder or Named Insured assigns to an insurance policy. Additional Insureds are typically added to an insurance policy via a rider or endorsement, which is an after-the-fact change to the policy.

Although Additional Insureds do not pay premiums, they are protected from risks that arise from the policyholder's actions under the policy terms. As a consequence, they are legally entitled to file a claim.

The main difference between the certificate holder and additionally insured in points

  • An additional insured is a document that helps to tell the terms and rights against an insurance policy taken by a person for a potentially uncertain future event, while a certificate holder is a plan that helps to tell the terms and rights against an insurance policy taken by an individual for a future uncertain event.
  • A claim applicable under the policy cannot be made by a person who has the certificate holder document, but the claim can be made by a person who has the extra insured document.
  • A person who holds a certificate holder document has the opportunity to educate about policy dismissals and changes, whereas a person who holds an extra insured document does not have any right to know about policy changes.
  • The name of the respective entity should be stated in the certificate holder's document, and the name of the entity, in the required language, must be mentioned in the extra insured's document.
  • For an insurance holder, the certificate holder is a must-have document; nevertheless, the supplemental document is not as vital as the certificate holder document.


Both the certificate holder and the additional insured are documents that safeguard a person from being charged with a violation as a result of the insurance policy he or she has obtained. Both of these contracts are designed to safeguard a policyholder. Even though both documents are about insurance, there are some variances between them.

They differ in everything from their origins to the context in which they should be employed. The ownership of one document is mentioned in one document, while the right of the insurance policy taken is stated in another document. A person should have a basic understanding of these two insurance phrases to understand their rights and obtain insurance according to their needs and desires.

Although the certificate holder is a document that shows the insurance's ownership, an extra insured is a document that verifies the rights of future affirmations under the insurance policy. It's worth noting that the Contractor or Client could be either a certificate holder or an additional insured. This will inform them of his rights, as they will both be protected by the policy and also will be informed of any changes in policy or cancellation.




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"Difference Between Certificate Holder and Additionally Insured." Diffzy.com, 2024. Mon. 26 Feb. 2024. <https://www.diffzy.com/article/difference-between-certificate-holder-and-additionally-insured-269>.

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