OGC Op. No. 10-09-12
The Office of General Counsel issued the following opinion on September 27, 2010, representing the position of the New York State Insurance Department.
RE: Certificate of Insurance
1) May a city fire department be named as a “certificate holder” on a commercial form that provides evidence of workers compensation insurance or liability insurance (i.e., a certificate of insurance)?
2) Is “certificate holder” a term synonymous with “additional insured”?
1) A city fire department may be named as a “certificate holder” on a commercial form that provides evidence of workers compensation insurance or liability insurance (i.e., a certificate of insurance).
2) No; the term “certificate holder” is not synonymous with the term “additional insured.”
An inquiry was made about certain forms that the inquirer described as workers compensation and liability insurance forms. Based on the inquiry regarding a “certificate holder,” it is apparent that the forms about which the inquiry was made are commercial forms that provide evidence of insurance, and that are commonly referred to as “certificates of insurance” within the insurance industry.
A certificate of insurance, in this context, 1 is a commercial document that is used within the insurance industry to provide evidence that the insured named on the form has insurance coverage in place. The form summarizes the essential terms and effective dates of the policies that are in force, and generally refers to the intended recipient of the form as the “certificate holder.” A certificate of insurance is not a contract, and is not required by statute or regulation.
“Additional insured” is an insurance industry term that refers to a person or entity that has been added to an insurance policy as an insured by the insurer at the behest of the insured that purchased the policy. Thus, the term “certificate holder” is not synonymous with the term “additional insured.”
The term “additional insured” is not defined by New York statute or regulation, although it is referenced therein. Pursuant to section 153.1(g) of title 11 of the New York Compilation of Codes Rules and Regulations (“NYCRR”) (Regulation 135), an insurance policy that provides liability coverage for more than one insured may constitute a group policy, unless excepted from the definition of “group policy.” 11 NYCRR § 153.1(g) reads as follows:
(g) Group policy means:
(1) a policy underwritten and issued on a collective basis of:
(ii) property/casualty insurance insuring the interests of two or more persons or entities; or
(ii) liability insurance insuring a Federal purchasing group or its members;
(2) where an insurer elects to issue a single policy with a first-named insured and additional insureds, such policy shall not be considered a “group policy” in regard to the following:
(i) corporations or other entities under common control as defined in section 107(a)(16) of the Insurance Law, with regard to their related interests;
(ii) franchisors and their franchisees, with regard to their related interests;
(iii) members of a partnership or joint venture, with regard to their related interests;
(iv) family members, but only for purposes of policies subject to Section 3425 of the Insurance Law; or
(v) shared interests, provided that such shared interests exist among all additional insureds, and only to the extent of such shared interests.
Thus, an entity may be included as an “additional insured” on another person or entity’s property/casualty insurance policy, but only to the extent that it has a shared interest with the first-named insured and all other additional insureds on the policy. 11 NYCRR
However, a certificate of insurance may not name an entity as an additional insured unless the insurance policy referenced by the certificate actually includes that entity as an additional insured. The purpose of a certificate of insurance is merely to provide evidence of insurance, and as such, it may not alter the terms of the policy. As stated in the Insurance Department’s Circular Letter No. 15 (1997):
A certificate of insurance which lists the pertinent coverage terms as they appear in the actual policy is not considered a policy form that requires the Superintendent’s prior approval. However, any document that amends, expands or otherwise alters the terms of the applicable insurance policy constitutes a policy form which must be filed with the Superintendent of Insurance in accordance with Section 2307(b) of the Insurance Law.
See also Circular Letter No. 8 (1995); and the New York State Insurance Department’s Office of General Counsel Opinions 08-05-13 (May 30, 2008); 07-07-16 (July 20, 2007); 07-05-09 (May 17, 2007); 06-11-16 (November 17, 2006); and 04-06-04 (June 8, 2004).
For further information you may contact Associate Attorney Sally Geisel at the New York City Office.
1 “Certificate of insurance,” as used in this context, should not be confused with a certificate that is issued to a covered person under a group insurance policy, which is a contract of insurance and not merely evidence of insurance coverage.