20.5 Additional Considerations

• Library: Virginia Construction Law Deskbook (Virginia CLE) (2019 Ed.)

20.5 ADDITIONAL CONSIDERATIONS

20.501 In General. In addition to the coverage basics discussed above, a construction project may give rise to certain specific insurance-related issues about which owners, contractors, and others should be aware. Of particular import in a construction setting are problems that may arise from the use of certificates of insurance and the potential impact of contracts to procure insurance.

20.502 Certificates of Insurance. Certificates of insurance often are required by a project owner as evidence that a contractor, architect, or engineer has insurance coverage in connection with the project. A certificate of insurance is issued by the insurer (or its agent) and typically lists the name and address of the insured, the type of coverage held by the insured, and the policy limits of such coverage. The certificate may, but will not necessarily, list potential limitations on the amount or applicability of coverage.

Certificates of insurance generally are accepted by project participants at face value. Relying on a certificate of insurance as evidence of another party's insurance coverage for a project, however, can be risky. A certificate of insurance may show that an insurance policy has been issued, but the certificate itself is not an insurance contract, does not grant coverage, and cannot be relied upon as independent evidence of coverage. ²¹⁴ In addition, a certificate of insurance does not confer greater rights than those set forth in the policy. ²¹⁵ It may appear from the face of a certificate that there is coverage for a project, but if the underlying policy contains exclusions or limitations, then a loss on the project may not actually be covered.

For these reasons, project participants should consider requesting copies of the policies themselves as evidence of insurance...