There is an occurrence of a financial loss in a company due to the common uncertain risks in a business. This holds a mandatory to be held against these uncertain risks, and for that, the term insurance was invented. In this process, there is an insurer that guarantees the payment of a full or half amount of any uncertain risk causing damage.
For this insurance, there are various documents that come into regard, and two of them is the certificate holder and the additional insured.
Certificate Holder vs Additional Insured
The main difference between a certificate holder and an additional insured is that a certificate holder is a document that helps to denote that a person owns something on a full-year or half-yearly basis, and on the other hand, an additional insured is a document that shows that a person has a right against an insurance policy.
A certificate holder is a document that helps to show proof that a person has ownership of that particular insurance policy. This acts as validation or proof of an insurance policy. A person in charge or of this document has all the right to information regarding any changes of termination by the side of the policyholder regarding his insurance policy.
The additional insured is a document that provides insurance for any uncertain future risk leading to any kind of damage. An additional insured has complete rights because of this policy to be authorized legally to make a claim on it. Although, there is no need to inform the holder of any alterations made in the policy.
Comparison Table Between Certificate Holder and Additional Insured
| Parameters of Comparison | Certificate Holder | Additional Insured |
| Meaning | This document specifies the ownership of an insurance policy. | This document specifies the rights of a person in an insurance policy. |
| Claim | A claim can be made available under this document. | A claim cannot be made available under this document. |
| Right to information | A person has the rights to know the changes made in the policy. | There is no need for a person to know the changes made in the policy. |
| Information | Information such as the name of the entity should be mentioned. | Information such as state of language and name of entity should be mentioned. |
| Importance | This document has more importance in terms of the insurance. | This document has less importance in terms of the insurance. |
What is Certificate Holder?
A certificate holder is a document that helps to show proof that a person has ownership of that particular insurance policy. This acts as validation or proof of an insurance policy. A person in charge or of this document has all the right to information regarding any changes of termination by the side of the policyholder regarding his insurance policy.
In this particular situation, that person gets the authority of the policyholder, which leads to that person getting the title of the certificate holder. Just by the meaning of certificate holder, it does not grant any kind of right to a person for incurring any kind of policy given to that company.
Basically, a certificate holder is a document that is just proof of the fact that an insurance policy is valid. Usually, it is observed that a policyholder appoints a contractor when it comes to issuing a certificate holder in the name of the entity that provided to do so. This document also provides details regarding the personal information of the holder as well as terms and conditions.
What is Additional Insured?
The additional insured is a document that provides insurance for any uncertain future risk leading to any kind of damage. An additional insured has complete rights because of this policy to be authorized legally to make a claim on it. Although, there is no need to inform the holder of any alterations made in the policy.
There can be additional people electing to join the insured policy and be called additional insureds. There is always a debate between the people who want to keep the scope of the document within limits and those who want to expand the scope of the limits of a document, such as a policyholder, etc.
The additional insured is basically a document that is used as a provision against general commercial liability. It helps to extend the vendor‘s scope and coverage towards his client. This also extended the scope of other parties who are related in any way to the policyholder having an additional insured document.
Main Differences Between Certificate Holder and Additional Insured
- A certificate holder is a document that tells us that a person is an owner of a certain insurance policy, and on the other hand, an additional insured is a document that helps to tell the terms and rights against an insurance policy taken by a person for a future uncertain event.
- There cannot be the availability of a claim applicable under the policy for a person having the certificate holder document, and, on the other hand, there can be claims applicable under the policy for a person having the additional insured document.
- A person having a certificate holder document has the right to get to know the information regarding the terminations and alternation made in the policy, and on the other hand, a person having an additional insured document does not possess any kind of right to be informed regarding any changes in the policy.
- In the document of the certificate holder, the name of the respective entity should be mentioned, and on the other hand, in the document of the additional insured, the name of the entity, in the required language, must be mentioned.
- The certificate holder is a must-have document for an insurance holder, and on the other hand, the additional document is not as important as the certificate holder document.
Conclusion
Both the document, that is, the certificate holder and the additional insured, are documents that protect a person from getting a violation from the insurance policy he or she or she has taken. Both these documents aim at protecting a policyholder. Even though both documents are related to insurance, they do have their differences.
They have their differences right from their meanings to in what context they are to be used. One document states the ownership, and on the other hand, the other document stated the right of the insurance policy taken. A person should have basic knowledge of these two terms of insurance which would help them to know their rights and take their insurance as per their need and desire.
References
- https://www.cabdirect.org/cabdirect/abstract/19611400738
- https://wildlife.onlinelibrary.wiley.com/doi/abs/10.1002/jwmg.402