The use of the word “blanket” in the context of additional insured endorsements on certificates of insurance (COIs) has been a subject of debate. Some insurance professionals believe it is permissible to reference “blanket” additional insured endorsements with phrases like “party or parties are included as additional insureds on a blanket basis per policy form XYZ.” Others argue that the term “blanket” is misleading and should be avoided.
What Is the Proper Wording for Reflecting Additional Insureds on COIs?
The consensus among industry experts is that using the term “blanket” is not accurate. ISO additional insured endorsements use terms like “automatic status” and specify conditions such as “when required in a written construction agreement.” The term “blanket” can have various interpretations, such as referencing a blanket limit or a blanket policy. To ensure clarity, precision in language is crucial.
COIs should also not include language that modifies, expands, or alters the terms of the underlying policy. Misusing the term “blanket” may create a false impression of coverage that differs from the additional insured endorsement’s actual terms.
Alternative Wording Recommendations
Instead of using the term “blanket,” consider these alternatives to describe additional insured status:
- “Certificate holder is an additional insured as per the attached endorsement.”
- “Certificate holder is an additional insured if in compliance with the conditions of the attached endorsement #XYZ123.”
These approaches shift the responsibility to the certificate holder to verify their compliance with the endorsement’s terms, minimizing the risk of misinterpretation.
Legal and E&O Implications
Using ambiguous language like “blanket” can expose agents and agencies to errors and omissions (E&O) claims. Mischaracterizing additional insured status can lead to detrimental reliance, where a party acts based on incorrect expectations of coverage, potentially resulting in litigation.
Final Advice
When issuing COIs, avoid paraphrasing or describing coverage. Instead, attach the relevant endorsement form and use precise language consistent with the policy terms. Always consult the insurer for guidance on acceptable wording, as stepping outside your authority can lead to legal and financial repercussions.
By adhering to these best practices, agencies can reduce risk and ensure clear, accurate communication regarding additional insured status.
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