One of the issues that arises far too often in cases I handle is lack of understanding of the purpose or role of documents called “Certificates of Insurance.” A “Certificate of Insurance” is not an insurance policy – it has no insuring provision, no exclusions, and typically no terms or conditions. These “Certificates” are usually issued by agents, brokers, or other producers, not the actual insuring entity. In such a situation, the correct and limited purpose of a “Certificate of Insurance” is merely to certify that a policy was issued to the named insured for the specific period listed. 

“Certificates of Insurance” do not provide coverage, nor do they confer any rights upon the certificate holder. When people assume that the “Certificates” represent coverage that does not exist on a policy, the “Certificates” become the subject of litigation. Most “Certificates” contain language on their face indicating that the “Certificate” is only issued as a matter of information and does not amend or alter the policy coverage. I have successfully litigated cases involving the following language, and obtained rulings that the subject “Certificate” did not create coverage:

 

I.

 

This certificate is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend or alter the coverage afforded by the policies below.

II.

 

We certify that we have issued the policy to the Named Insured for the policy period as identified in this Certificate. Notwithstanding any requirements, terms or conditions of any contract or other document with respect to which this Certificate may be issued, the insurance is that which we customarily provide for the coverage indicated in Item 6 below. This Certificate is issued as a matter of information only and does not amend, extend or alter the coverage afforded by the policy.

Now, the producer issuing the “Certificate” may face liability for failing to accomplish the directions of its client. But, absent any misrepresentation or conduct estopping the insurance carrier from denying that coverage exists, “Certificates of Insurance” should not create coverage. 

 

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Photo of Parks Chastain Parks Chastain

Parks T. Chastain is a member of the law firm of Brewer Krause Brooks Chastain & Meisner, PLLC. He graduated from the University of Louisville, where he earned a B. S. in Sociology, awarded with high honors, in 1986. He earned his J.

Parks T. Chastain is a member of the law firm of Brewer Krause Brooks Chastain & Meisner, PLLC. He graduated from the University of Louisville, where he earned a B. S. in Sociology, awarded with high honors, in 1986. He earned his J. D. also at the University of Louisville, Brandeis School of Law, where he graduated cum laude. He served as editor of the Journal of Law & Education, was a two year member of the National Moot Court Team, and a member of the prestigious Brandeis Society. He was admitted to the Tennessee Bar in 1989.

Mr. Chastain represents insurers on a state and national basis in the investigation of first party claims, and in litigation arising from first party and third party coverage disputes. Read More…