A certificate holder is requiring an agent’s insured to list the certificate holder as an additional insured on the certificate of insurance, and also to list two of its affiliates/subsidiaries in the description box as additional insureds.

The client's policy includes an endorsement which provides “blanket additional insured" status to the entity with whom they have a written contract, but the certificate holder still insists that the COI must specifically list both it and its affiliates as additional insureds.

The agent sends each entity separate certificates listing each entity as a holder and showing additional insured status, but they reject it and send a request for one certificate.

When the agent asks the carrier their stance, they send the following reply:

• When multiple holders are listed, only list the holder with whom the insured has the written contract.
• When an additional insured is listed via a specific endorsement, attach a copy of the endorsement or indicate the endorsement number and edition date.
• When additional insureds are included under a blanket, do not mark the additional insured box. Instead, in the description box, include the wording: “the endorsement amending the business owner's liability coverage form includes several additional insureds automatically."

Q: Is the carrier correct?

A: Several issues must be addressed here. First, be very careful with the phrase “blanket additional insured." There is no such thing as a blanket additional insured endorsement, and I wish the carrier wouldn't use this phrase, either—ISO offers various automatic additional insured endorsements, and they differ greatly.

For example, the CG 20 33 Additional Insured – Owners, Lessees Or Contractors – Automatic Status When Required In Construction Agreement With You endorsement requires privity of contract for additional insured status to be granted. This means only the actual parties to the contract—not just the list of people in the contract the lower tier is required to list as an additional insured—are granted any protection as an additional insured.

In comparison, the CG 20 38 Additional Insured – Owners, Lessees Or Contractors – Automatic Status For Other Parties When Required In Written Construction Agreement endorsement grants additional insured status to any party the contract requires to be given such status. Privity of contract is not necessarily required—only that additional insured status be extended to parties specified in the contract.

But even this endorsement requires the named insured to be working on behalf of the additional insured to garner any protection. Additional insured status is granted, but it's mostly a myth. This is also true in the CG 20 10.

Second, due to the issues surrounding the options for additional insured status based on the specific endorsement used, I would recommend against sending separate COIs stating the holder is an additional insured unless the CG 20 38 or similar wording is used. Sending separate COIs could create a detrimental reliance on the part of the holder.

Finally, I think the carrier is incorrect in recommending you use that wording in the description of operations. It’s is overly broad, may be technically incorrect and really means nothing. You should list the endorsement with edition dates and provide a copy of it to the holder.

Regardless of whether you agree with the carrier, you generally have to follow their guidelines. Always read the COI like a person with no insurance background would. If there are any unclear phrases that could be misinterpreted, don't use them. Stick to the facts. Name, duties and policy forms in use, and only include what’s true in the policy.

Chris Boggs is executive director of the Big “I” Virtual University (VU).

This question was originally submitted by an agent through the VU’s Ask an Expert Service. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.