A certificate of insurance has many labels you may need to become more familiar with if you hire vendors and request COIs. In this blog, we will talk about the  “certificate holder” and the best way to tackle it for COI management purposes.

What is a Certificate Holder for Construction Insurance?

A certificate holder on an ACORD 25 form is the business or person listed on an insurance certificate who manages the COI-obtaining process. The standard process for hiring vendors and contractors includes requesting a COI to ensure they have adequate insurance coverage for that specific project. They are also notified if the insurance policy is canceled or changed. 

If you request COIs, you are most likely listed as a Certificate Holder, but this designation can also apply to other businesses or individuals listed in the contract. Commonly, this includes the general contractor, owner, or lender(s) in construction contracts.

Where is a Certificate Holder Listed on a COI?

An insurance Certificate Holder will typically be listed in the designated box at the bottom left of the COI, also known as the ACORD 25 form. It’s mandatory for businesses to accurately list the Certificate Holder on the COI to provide proof of coverage.

Standard ACORD 25 Form

Effective COI management involves not only understanding who the certificate holder is but also verifying that the COI meets your specific requirements. This includes checking that the coverage limits, policy types, and additional insured endorsements align with what your business needs to protect itself from potential liabilities. Proper management of this process ensures compliance and mitigates risks associated with inadequate insurance coverage.

If interested, you can learn more about certificates of insurance in this free guide: How to read a COI.

Should You Be Listed As A Certificate Holder?

Certificate Holders are a standard requirement on any vendor’s certificate of insurance. However, it is important to note that being listed as a Certificate Holder for insurance does not grant entitlement to insurance coverage listed on your vendor’s policy in the event of a legal claim.

The ACORD 25 form explicitly states: “The certificate is issued as a matter of information only and confers no rights upon the certificate holder.” This means that while the certificate provides information about the insurance coverage held by your vendor, it does not by itself guarantee any protection or benefits to the Certificate Holder in case of a claim or loss. To help protect your business, it’s essential to ensure that contractual agreements and additional insured endorsements are properly in place to obtain the necessary coverage. 

Expedite Construction COI Compliance with Billy

Certificate Holders must be notified in writing if the vendor decides to cancel or change the policy. In practice, the vendor’s insurance broker contacts the Certificate Holder(s) directly to notify them of the cancellation notices on all affected projects. 

This proactive communication ensures that all parties involved are aware of changes in insurance status that could impact ongoing projects. Effective management by Certificate Holders involves not only obtaining certificates initially, but also maintaining open lines of communication regarding any updates or changes to insurance coverage. 

Implementing compliance management software such as Billy offers a scalable solution tailored to handle all projects and vendors effectively. This software seamlessly integrates with leading project management systems such as Procore and Autodesk, streamlining the compliance process and significantly minimizing operational friction between vendors and their brokers. Billy’s automated digital platform simplifies the process of tracking expiration dates and requesting renewals from vendors, ensuring everything is up to date. 

To simplify the process, users can direct physical notices of construction insurance policy cancellations from insurers to a designated P.O. Box managed by Billy. Our team will promptly scan these notices into a digital format and email them to the designated recipients. This streamlined approach ensures quick and reliable communication regarding any changes to insurance coverage, enhancing transparency and efficiency.

Benefits of a Billy for Insurance Certificate Holder

Billy offers several significant benefits that can help streamline COI management and enhance operations:

  1. Simplified Insurance Auditing Process: By centralizing all insurance certificates within Billy, the annual auditing process becomes more efficient. Instead of manually collecting and verifying certificates from each vendor, Billy provides a consolidated platform where all relevant documentation is stored and easily accessible. This reduces the time and effort required for auditing, ensuring compliance with insurance requirements across all projects and vendors.
  1. Reduction of Physical Mail: Managing insurance-related correspondence often results in a significant volume of physical mail. Billy alleviates much of the bulk by providing a dedicated P.O. box where all incoming mail, including insurance notices, is received.
  1. Digitization and Centralized Storage: Billy’s capability to digitize incoming mail ensures that all insurance-related documents are promptly captured in an easily accessible digital format. 
  1. Digital Forwarding of Notices: In the event of insurance policy cancellations or changes, Billy can digitally forward notices to designated recipients. This proactive approach ensures Certificate Holders and other stakeholders are promptly informed about critical updates that may affect ongoing projects.

Navigating the role of the insurance Certificate Holder and effectively managing COIs are critical for businesses, particularly within the AEC industry, where interactions with vendors are frequent and oftentimes complex. By leveraging tools like Billy’s compliance management software, construction companies can streamline COI management, integrate seamlessly with project management systems, and automate processes to enhance efficiency. 

Frequently Asked Questions

What is the difference between a certificate holder and an additionally insured?

Certificate holders verify insurance coverage without gaining coverage themselves, whereas additional insureds receive direct coverage under the policy. Certificate holders are also listed on the COI, while additional insured requires a separate endorsement to the insurance policy.

How do I add a Certificate Holder to insurance?

A Certificate Holder is required on all standard COI forms. To learn more about how to read and interpret certificates of insurance Billy offers a free guide: How to read a COI.

Can you have two Certificate Holders on a COI?

Yes, there can be multiple Certificate Holders listed on a COI. Businesses often list multiple parties as certificate holders to fulfill contractual requirements or to ensure that various stakeholders are informed on insurance coverage. Leveraging tools like Billy can eliminate the need for various Certificate Holders, as Billy manages correspondence about any updates/changes to insurance. 

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