The person who has worked as a subcontractor has at any time demanded the insurance or insurance certificate. A certificate is nothing but a snap shot of your current insurance coverage at the time it is issued. It will show your current limits of liability, the insurance company provides coverage and the period for which coverage is available. In addition to requiring a certificate, many contracts require that your customer be added as an additional insured. This would allow your coverage to protect you and your client in case of a claim. Additional insured status may also limit any subrogation against your customer by your insurance company. It would be unusual to subrogate a party to the contract. Additional insurance status is nothing but a risk transfer to another party. Issues arise when you have signed a contract that requires the certificate to be changed or additional additions are added to your coverage, especially when you make these requests after the work has been completed. It is imperative that you read a contract before signing it and confirm with your insurance provider that you either meet the insurance requirements of the contract or can meet them before the work begins.
Contract usually requires that you meet one or more of the following requests, delete forms on the certificate, add specific forms, add general contractor, or owner as an additional insured, or add forms to the certificate. Your client tries to limit his responsibility. Assigning the owner to the construction contract does not change the insurance certificate, and as such, the Accord 25 01 08 certificate contains several statements that attempt to clarify what a certificate does.
This certificate is issued for information only and does not entitle the holder of the certificate. This certificate does not change, extend or change coverage according to the policies below.
The policies listed below have been issued to the insured listed above for the specified policy period. Notwithstanding any requirement, terms or conditions of any contract or other document that this certificate may be issued or may imply, the insurance is governed by the policy described herein under all terms, exceptions and terms of such policy. Total limited limits may have been reduced with paid receivables.
The insurance certificate on the back of this form does not constitute an agreement between the issuing insurer, authorized representative or manufacturer and holder of the certificate, and it does not confirm or change, extend or change coverage according to the policies specified therein.
An insurance policy is an agreement between the insurance company and you, and unless the policy has been approved by the company, any further or deleted wording on a certificate has no bearing on a potential requirement. Certain contracts require that the wording of this insurance is primary and non-contributory. If your client has been added as an additional insured, a current CGL policy with the correct inscriptions would provide primary coverage without the wording. Some requests that words strive to be deleted will be most companies that will notify only those who are added as an extra insured. Some states have made it illegal to change a certificate. It should also be noted that most case-law supports the idea that a certificate is only provided for information and not included in an insurance contract.
You may wish to add a specific form to your policy. In attempting to limit liability, insurance companies have deliberately limited coverage to additional insurance. In an attempt to get this coverage back or out of ignorance, your customers ask that old and outdated forms are added to your coverage. Usually they ask that they be added as an additional insured with form CG 2010 11 85, this form provides complete business protection. Old forms may violate current liability policies, and in some cases companies may not use these forms by law. What a form used to do now takes two, CG 2010 10 01 and CG 2037 10 01.
A simple understanding of what a certificate will do will go a long way to help you meet your contractual obligations. An insurance certificate does not change your policy. Unless your policy has been approved by the insurance company, your needs have not been met. In some states, it is a violation of the law to change or change an insurance certificate. It is imperative that correct and current forms be used, in most cases your agent can explain to your client why a form must be used in contrast to one that may have been requested. Read your contract even though you may have submitted an acceptable certificate and added your client as an ad