Certificate Holder v. Additional Insured - What is the Difference?

It’s amazing how few business owners "main contractor" know the distinction between being a Certificate Holder on a vendor's or sub-contractor’s, the "Named Insured" policy, and being an Additional Insured. There is a clear, and measurable difference between these two Certificate of Insurance functions. I will try and keep it as simple as possible.

Certificate Holder: The "main contractor" is provided with a certificate of insurance that shows that the sub-contractor or vendor, the "Name Insured" does in fact maintain insurance and names the main contractor as the "Certificate Holder." It is just a proof of insurance.

Additional Insured: The main contractor is named as an “additional insured” on the certificate of insurance and is actually given coverage, and has rights under the sub-contractor’s or vendor's, the "Named Insured" policy in the event of a future claim. Some carriers will charge the sub-contractor or vendor a premium for this privilege because they are actually conferring coverage.

Bottom line: Certificate Holder is simply proof of insurance, where as Additional Insured status gives the main contractor coverage and rights under their sub-contractor's or vendor's, the "Name Insured" policy.