Traditionally certificates of insurance have been considered evidence of additional insured status, but do not, standing alone, establish additional insured status. Rather, the additional insured is required to prove its status through a copy of the actual policy or endorsement identifying it as an additional insured. However, a recent holding by the Washington Supreme Court has reignited the debate concerning whether a form certificate of insurance representing that a party is an additional insured can, by itself, make that party an additional insured despite general disclaimers that they do not confer rights on the certificate holder.
Here, T-Mobile NE hired a contractor to construct cell phone towers on a rooftop in New York City. While the contract between the parties required the contractor to procure commercial general liability policy and name T-Mobile NE as an additional insured, T-Mobile USA was not a party to that contract and was not named as an additional insured on the contractor’s policy issued by Selective Insurance Company of America. When the building owner sued T-Mobile USA for damages to its rooftop arising from the construction of the cell phone tower and T-Mobile USA tendered the claim to Selective, it denied coverage on the basis that T-Mobile USA was not an insured.
Selective’s agent, acting on behalf of the insurance company, issued the certificates of insurance naming T-Mobile USA as an additional insured on the Selective policies; however, they contained the standard general disclaimers stating that the certificates do not confer coverage rights on the certificate holder.
The Washington Supreme Court held that boilerplate disclaimers on certificates of insurance, along with contradictory representations in the form stating that the certificate holder is an additional insured, was sufficient to establish T-Mobile USA as an additional insured. Specifically, the Washington high court held that when those representations on the certificate of insurance are made by an agent of the insurer with the apparent authority, it “binds the insurance company, even when that specific representation is transmitted via a certificate of insurance and accompanied by general disclaimers.” The Court relied on textual interpretation principals stating that the specific prevails over the general terms —here, the general disclaimers. The Court stated that giving effect to the general disclaimers, and not the specific and contradictory representations that T-Mobile USA is an additional insured, would render the certificates of insurance “pointless” and would only serve to “set a trap” for the certificate holder.
While there are courts that have reached a different result (see e.g.,Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314 (Tex. 2006)), this case breathes new life into third-parties’ arguments that they are additional insureds under policies when the only evidence of additional insured status is a certificate of insurance with general disclaimers.