The Court of Appeals for the Seventh Circuit recently held that a Certificate of Insurance was not a prerequisite to additional insured coverage. In Cincinnati Ins. Co. v. Vita Food Products, Inc. 808 F.3d.702 (7th Cir. 2015). The defendant insurer brought an action against a company claiming to be an additional insured under a commercial general liability insurance policy seeking a declaration that it was not obliged to provide coverage to the company. There was conflicting evidence as to whether the oral agreement to add the additional insured was entered into before or after the accident. While the carrier would not be entitled to summary judgment on that issue it maintained that it was still entitled to summary judgment because no fact issue existed concerning the fact that the Certificate of Insurance did not issue until after the accident. The district court granted summary judgment which was reversed upon appeal.
The Court of Appeals held that the policy clearly required the oral agreement to be entered into prior to the accident but was not explicit as to when the certificate had to be issued. The policy was found to be ambiguous and the court pointed out that it could have been construed as requiring the certificate merely to memorialize the agreement, in which case the date of issuance would not matter but also observed that the policy explicitly provided the oral agreement was a sufficient basis for adding an additional insured and that the Certificate of Insurance was not an agreement, and, by its own terms, stated that it did not confer rights or extend or alter coverage. Since the language on the certificate could not be construed as a pre-condition, if defendant could prove that an oral agreement to name it as an additional insured was entered into prior to the accident, it would be entitled to coverage regardless of the fact the certificate was issued later. The summary judgment in favor of the plaintiff carrier was reversed and remanded for further proceedings.