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Information or Indemnity: Do Certificates of Insurance Grant Insured Status?

February 28, 2020

Often, a person or entity that is attempting to claim additional insured status under the insurance policy of another will rely on a “Certificate of Insurance” that was issued by the named insured’s agent.  However, there are some considerations an insurer should take into account when presented with such a document before affording coverage to a certificate holder.

Frequently, the insurance agent or producer issuing the certificate will use the ACORD form.  This form clearly states at the top that

This certificate is issued as a matter of information only and confers no rights upon the certificate holder.  This certificate does not affirmatively or negatively amend, extend or alter the coverage afforded by the policies below.  This certificate of insurance does not constitute a contract between the issuing insurer(s), authorized representatives or producer, and the certificate holder. 

It further states, “Important: if the certificate holder is an additional insured, the policy(ies) must be endorsed.” 

The majority rule is that a certificate of insurance that contains such language will not bind the insurer unless the agent who issues the certificate is acting pursuant to authority granted by the insurer. Florida case law that explicitly adopts this position is scarce.  However, in a footnote to Official Cargo Transp. Co., Inc. v. Underwriters at Lloyd’s of London, an unpublished opinion, the Eleventh Circuit Court of Appeals agreed with the trial court below that coverage was not afforded under the certificate of insurance. The appellate court indicated that the “certificate of insurance did not in any way evidence that [the insurer] had agreed to the addition of [the certificate holder] as a named insured.” Thus no coverage was afforded and the trial court properly granted summary judgment in favor of the insurer. In Nexus Properties, Inc. v. Clarendon Nat’l Ins. Co., the United States District Court for the Southern District of Florida relied on this commentary to rule that the certificate holder seeking coverage was not an insured under the policy. The certificate did not create coverage or any legal obligations between the insurer and the certificate holder.

A couple of notable exceptions to this general rule do exist in Florida.  The insurer should review all the facts available to it before concluding the certificate holder is not an insured.  As mentioned above, one exception exists under Florida law in the rare instance when the producing agent acts with authority granted by the insurer.  Another exception arises where the insurance policy affords coverage to the certificate holder irrespective of the certificate.  There are several instances where this situation may arise.  A couple of common examples include policy provisions that provide coverage as a result of a contractual obligation and provisions that provide coverage to the permissive user of an automobile.

Before denying coverage to a person or entity seeking insured status, an insurer should consult with an attorney to determine whether any policy provisions afford coverage irrespective of the certificate of insurance, whether the producing agent acted with authority granted by the insurer, or whether any other exceptions may apply under the State’s laws that govern the insurance policy’s interpretation.

  1. Mountain Fuel Supply v. Reliance Ins. Co., 933 F.2d 882, 889 (10th Cir. 1991) (“Absent a plain manifestation of the intent to incorporate a certificate or endorsement into an insurance policy, the policy will remain in force as originally written.  The majority view is that where a certificate of insurance, such as the ACORD certificate, expressly indicates it is not to alter the coverage of the underlying policy, the requisite intent is not shown and the certificate will not effect a change in the policy”) (citations omitted); Taylor v. Kinsella, 742 F.2d 709, 711 (2d Cir. 1984) (“As a general rule, where a certificate or endorsement states expressly that it is subject to the terms and conditions of the policy, the language of the policy controls.  This rule accords with the widely recognized principle that the intent to incorporate additional papers into an insurance policy must be plainly manifest”) (citations omitted).  Trapani v. 10 Arial Way Assocs., 755 N.Y.S.2d 396, 399 (Sup. Ct. 2003) (“[A] certificate of insurance which expressly states that it is a matter of information only and confers no rights upon the certificate holder… is insufficient, by itself, to show that such insurance has been purchased.”) (internal quotation marks omitted); TIG Ins. Co. v. Sedgwick James of Washington, 184 F. Supp. 2d 591 (S.D. Tex. 2001) (“[W]hen a certificate of insurance contains language stating that the certificate does not amend, extend, or alter the terms of any insurance policy mentioned in the certificate, the terms of the certificate are subordinate to the terms of the insurance policy. The certificate of insurance will not suffice to create insurance coverage if such coverage is precluded by the terms of the policy.”).
  2. Official Cargo Transp. Co., Inc. v. Underwriters at Lloyd’s of London, 143 Fed. Appx. 173, n.1 (11th Cir. 2005).
  3. Id. 
  4. Id.
  5. Nexus Properties, Inc. v. Clarendon Nat’l Ins. Co., 2008 WL 11399625, at *5 (S.D. Fla. Jan. 15, 2008).
  6. Id.