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:
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.
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.