Additional Insured Status on COI
The indication on a certificate of insurance that a third party has been added as an additional insured on the underlying policy.
What It Is
Additional Insured Status on a COI refers to the indication on the ACORD 25 certificate that a certificate holder has been added as an additional insured on the underlying liability policy. This is typically shown by checking the "Additional Insured" box in the applicable coverage section and by referencing the specific endorsement in the Description of Operations section.
It is critical to understand that the certificate itself does not create additional insured status. The certificate merely reports what is endorsed on the policy. If the certificate indicates additional insured status but no corresponding endorsement exists on the policy, the certificate holder does not actually have additional insured coverage — despite what the certificate appears to show.
This gap between certificate representation and actual policy coverage is one of the most significant risk areas in commercial insurance. Certificate holders often rely on the COI as proof of their additional insured status without verifying the underlying endorsement.
Why It Matters for Brokers
Brokers face enormous pressure to issue certificates showing additional insured status quickly, sometimes before the endorsement has been confirmed by the carrier. Issuing a certificate that shows AI status without a verified endorsement is a serious E&O exposure. If a claim arises and the certificate holder tenders to the sub's policy as an additional insured, but no endorsement exists, the claim is denied — and the broker who issued the certificate faces liability for the misrepresentation.
Real-World Example
A GC requires a certificate from a subcontractor showing additional insured status within 24 hours or the sub cannot start work on a $400,000 project. The sub's broker issues the certificate with the additional insured box checked and CG 20 10/CG 20 37 referenced in the Description of Operations, but the carrier has not yet confirmed the endorsement. The sub starts work. Two months later, a claim arises and the GC tenders as additional insured. The carrier reviews the file and finds no additional insured endorsement was ever issued. The claim against the GC is denied under the sub's policy. The GC sues the sub for breach of contract and the sub sues the broker for issuing a misleading certificate.
Common Mistakes
- 1Issuing certificates showing additional insured status before the carrier has confirmed the endorsement is on the policy.
- 2Not referencing the specific endorsement form number (CG 20 10, CG 20 37, etc.) in the Description of Operations, which best practice requires.
- 3Assuming a certificate showing AI status is sufficient proof of coverage without ever verifying the underlying endorsement.
How brokerageaudit.com Handles This
COI Manager prevents the additional insured box from being checked on any certificate unless Policy Checker has verified a corresponding endorsement (blanket or specific) on the underlying policy. It auto-populates the endorsement form number and edition date in the Description of Operations. If an endorsement is pending but not yet confirmed, the system allows a provisional certificate with a clear notation that endorsement confirmation is pending.