Are you an Additional Insured or a Certificate Holder?

Posted by Lyndsey M. O'Connell | Apr 06, 2020 | 0 Comments

It depends. In many real estate and construction transactions, you see a request for either a purchaser, owner, landlord or general contractor to be named as an additional insured or certificate holder to verify coverage of remote loss. However, the terminology and application have be skewed in the industry and are not what you think they may be. 

Simply being a certificate holder does not make you an additional insured. The named insured must obtain an endorsement to the policy naming the additional insured. Further, additional insured only applies to Liability Insurance, not Property Insurance, so many of the policies we think are covering us, in fact do not. Further, they normally exclude professional services, such as architects or design professionals, which could leave a huge gap in coverage should damages flow from one of those industries. This gap opens you up to significant risk. 

The bottom line is that a purchaser, owner, landlord or general contractor should require to be named, along with any affiliates of theirs, as an “Additional Insured” by endorsement to the tenant's CGL and Property Insurance policies. 

Finally, being an “Additional Named Insured” seems like it would cover all the bases. However, without proper clarification and confirmation from the insurer, it is likely not applicable to the General Contractor or landlord. That is because those protections are typically reserved for the affiliates of the Named Insured, not for lenders, landlords or other unaffiliated parties. 

The information contained on this blog is intended to be general information only and not legal advice nor is an attorney-client relationship created by this blog. Laws change frequently and the information on this website may not be up to date, nor is the information intended to be fully comprehensive. If you are involved in a real estate or construction transaction where an insurance policy is at issue, we suggest having legal counsel review such documents to ensure protections. 

About the Author

Lyndsey M. O'Connell

Lyndsey is a Mississippi native who has found a place to call home in Colorado. She attended high school in the Mississippi Delta at St. Joseph Catholic School. She attended college at Millsaps College in Jackson, Mississippi, obtaining her BS in Special Education. Post-graduation, Lyndsey spent ...


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