Certificates of insurance: what contractors should check 

A certificate is evidence, not a policy amendment.

California Insurance Code section 384 addresses statements on certificates or verifications issued as evidence instead of a policy copy. Its core distinction is that a certificate is not an insurance policy and does not amend, extend or alter the listed coverage. The statute also has a specific exception for a surplus line broker certificate defined in section 48.

For an ordinary project certificate, names, policy dates, types of coverage and limits are a summary to check against the actual insurance. A project requirement written into a certificate’s description does not make unavailable coverage appear in the policy.

Certificate holder and additional insured are different.

A certificate holder is the recipient named on the certificate. Merely listing a property owner, general contractor or other party there does not automatically grant that party additional insured protection.

Additional insured status depends on policy wording and any applicable endorsements. Some endorsements name a particular party; others can apply on a blanket basis when conditions are met, such as a qualifying written agreement. Ask whether the requested party qualifies, for what work and during what period.

Read the requested endorsements in context.

Contract wording may refer to ongoing operations, completed operations, primary and noncontributory insurance, or a waiver of subrogation. These phrases address different issues and are not interchangeable checkboxes.

The insurer may need to approve an endorsement, and a requested form or scope may not be available. Have a broker review the insurance request and obtain legal advice for interpreting or negotiating contractual responsibilities. Do not assume a certificate establishes that every clause is satisfied.

• Which entities need additional insured status, and for which operations?
• Does the contract address completed work as well as work in progress?
• Are primary/noncontributory terms or waivers requested for specific policies?
• Do required limits, dates and locations match the proposed coverage?

Send a complete request before work begins.

Give the broker the insurance section of the contract, not just a message saying “send a COI.” Include the legal names, address for the certificate holder, project description and requested start date. Explain work that differs from your usual operations.

If the job includes subcontractors, ask what documentation your contract and insurer require from them. Collecting a certificate is not the same as confirming that their work, limits and endorsements meet those requirements. Do not edit a certificate yourself to make its wording fit a request.

Recheck changes, renewals and policy dates.

A longer project can outlast the policy period shown on the original certificate. A change in scope, additional location or different subcontracting arrangement can also require a new conversation. Keep requests and the documents supplied in an organized project record.

A certificate does not guarantee that coverage will remain unchanged or that a claim will be paid. Discuss applicable cancellation-notice provisions and get written confirmation of policy changes or coverage effective dates from the appropriate party.