Does a Certificate of Insurance Grant "Additional Insured" Status to a Public Agency?

Most public agencies require that the contractors and consultants they contract with carry Commercial General Liability Insurance and Commercial Automobile Insurance.  

What is an Additional Insured?  But because the contractor or consultant is the "named insured," they are the only party covered in the event of a claim, unless the public agency is also named as an "additional insured" under the contractor's or consultant's insurance policy.

What evidence should a public agency obtain to ensure they are, in fact, named as an "additional insured" on the contractor's or consultant's insurance policies?

Certificate of Insurance is Not Sufficient Evidence:  Often, public agencies will accept a certificate of insurance as evidence that they are named as an "additional insured," especially if the certificate of insurance states on it that the public agency is an "additional insured."  However, the certificate of insurance does not provide certainty that the public agency is actually an "additional insured."  

What is an Acord Form?  One of the most common insurance industry certificates of insurance is an Acord form.  The language in the upper right hand corner of the Acord certificate of insurance states that the following:

"This certificate is issued as a matter of information only and confers no rights upon the certificate holder."

The certificate holder is the public agency.  In other words, the certificate of insurance is informational only and does not confer "additional insured" status on the public agency.  

Get an Endorsement:  The only thing that modifies an insurance policy to guarantee that the public agency is an "additional insured" under the contractor's or consultant's insurance policy is an endorsement to the policy.  An endorsement is an amendment or modification to the insurance policy.  Thus, even if the certificate of insurance names the public agency as an additional insured, it is not evidence that the insurance policy has been amended to reflect the public agency being named as an "additional insured."

Crossing Out Acord Form Language:  Some public agencies will require the insurance broker to cross out the language on the Acord certificate of insurance noted above.  This causes two problems.  

1. Insurance brokers and agents are very hesitant to cross out this language, because a certificate of insurance is only informational.  
2. Even if the public agency is successful in getting an insurance broker or agent to cross out the language, the modified certificate of insurance does not demonstrate that the policy has been endorsed, or amended, to name the public agency as an "additional insured."  Only an endorsement is evidence of "additional insured" status.

Protect the Public's Interests:  Public agencies should require that they be named as an "additional insured" under a contractor's or consultant's insurance policies in order to have the public agency covered in the event of a claim.  As evidence of "additional insured" status, public agencies should require a certificate of insurance and an endorsement naming the public agency as an "additional insured."

Mike Purdy's Public Contracting Blog 

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