Certificate Holder Liability Insurance Explanation

Certificate Holder Liability Insurance is a new type of insurance coverage that provides a new way to handle coverage problems presented by entities with a certificate of insurance. This includes problems presented to holders of insurance when accepting an insurance certificate from an insurance provider. This type of insurance is designed to assure holders of a certificate that third-party coverage that is provided by others is available when it is needed of a certificate holder.

  1. Guarantee

    • Insurance provided by certificate holder liability provides a guarantee that the insurance stated on the certificate is available to protect the certificate holder. Protection is provided to a certificate holder by the policy when the underlying insurance indicated on the certificate is not in force on the date a loss occurs. Underlying insurance may not be in force because of the cancellation or expiration of the insurance policy.

    Features

    • Certificate holder liability insurance has specific features that apply to a policy. One feature is that a high deductible applies than what is indicated on the certificate. Another feature is that the policy is in excess to the insurance already in force of the certificate holder. This means that a certificate holders primary insurance applies first before the certificate holder liability insurance. This type of insurance also has exclusions that do not apply to certain types of underlying insurance policies.

    Coverage Extension

    • Individuals with a certificate holder liability insurance policy possess a continuing coverage benefit. The benefit provides for coverage and limits that appear on the certificate are made available to the holder of the certificate up to 15 days after the policy's expiration date. This means that coverage will still be in force if certificate holder faces a delay obtaining a new certificate of insurance.

    Waivers

    • Third parties that provide the certificate of insurance can obtain a waiver in the event that coverage is not in force for a specified reason. Exceptions to the waiver include deliberate cancellation and the voluntary reduction of coverage. Certificate providers that do not obtain a waiver may be obligated to repay an insurer for any payments made under an underlying policy. This waiver is available to certificate providers for an additional small premium amount.

    Gaps

    • Certificate holder liability insurance fills a gap that exists with property owners that require insurance coverage for various projects. This type of insurance will provide the assurances that are needed by property owners that insurance coverage will be available. Currently, there are no insurance products available that will provide an insurance guarantee based on a certificate of insurance.

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