Answering a certified question from the Ninth Circuit, the Washington Supreme Court issued a surprising decision, holding that certificates of insurance can create coverage despite express disclaimers that they do not aEURoeamend, extend or alter the coverage afforded byaEUR? the policy.[1] This decision is inconsistent with precedent from courts across the country that routinely hold certificates of insurance are informational documents only that cannot supplant the terms of an insurance policy.

In this Washington case, T-Mobile USA, made a demand for additional insured coverage in connection with a suit filed by the owner of a New York City rooftop on which T-Mobile USAaEUR(TM)s subsidiary, T-Mobile NE, had constructed a cell phone tower. T-Mobile NE had previously contracted with a service contractor to perform services in relation to the construction of the cell tower. T-Mobile NEaEUR(TM)s contract required the contractor to name T-Mobile NE as an aEURoeadditional insuredaEUR? under its liability policy.

In turn, the contractor obtained an insurance policy that provided additional insured status to a third party if the contractor was required by contract to provide additional insured coverage to the third party. In conjunction with the issuance of the policy, the contractor also had a certificate of insurance issued, which stated that aEURoeT-Mobile USA Inc., its Subsidiaries and AffiliatesaEUR? were aEURoeincluded as an additional insuredaEUR? under the policy, and was signed by the insurance agent as the insureraEUR(TM)s aEURoeAuthorized Representative.aEUR? The certificate was issued on an industry-standard form, which included disclaimers in bold capital letters that the certificate was provided for informational purposes only and could not aEURoeamend, extend or alter the coverage afforded byaEUR? the policy. The certificate specifically stated that it did not aEURoeconfer rights to the certificate holderaEUR? as an additional insured absent proper endorsement of the policy itself.

When the owner of the rooftop sued the contractor and T-Mobile USA (not T-Mobile NE) for damages allegedly associated with the construction of the cell tower, T-Mobile USA and the contractor tendered the suit to the insurer for coverage. The insurer rejected T-Mobile USAaEUR(TM)s tender on the ground that it did not qualify as an additional insured under the policy. Specifically, the insurer argued that T-Mobile USA was not entitled to coverage because it was T-Mobile NE, not T-Mobile USA, that had a contract with the contractor requiring additional insured coverage.

In the ensuing coverage litigation, the trial court granted summary judgment in favor of the insurer. However, on appeal, the Supreme Court of Washington held that the certificate of insurance, which stated that T-Mobile USA was an additional insured, created coverage for T-Mobile USA under the policy even though T-Mobile USA was not entitled to coverage under the terms of the policy itself. Rejecting the argument that the certificate could not create coverage, the court held that the aEURoespecific written-in additional insured statement thus prevails over the preprinted general disclaimers.aEUR?

Notably, the American Property and Casualty Insurance Association filed an amicus brief, arguing that allowing certificates of insurance to create coverage would conflict with public policy by putting an aEURoeend to the use of a tool that many stakeholders find useful when appropriately limited to its intended use as an aEUR~information-onlyaEUR(TM) communication that clearly explains that status.aEUR? The court rejected this argument, finding that its decision provides insurers with aEURoeincentive to ensure that the agentaEUR(TM)s representations aEUR| are trueaEUR? and that a contrary result would mean aEURoean insurance companyaEUR(TM)s representations would be meaningless and it could mislead without consequence.aEUR?

The dissenting opinion noted the long-understood principle that certificates of insurance are aEURoetools of the insurance tradeaEUR? and generally considered in the insurance industry to be aEURoeinformational documents onlyaEUR? that aEURoedo not confer insurance coverage.aEUR? Applying this principle, the dissent stated that awarding coverage to T-Mobile USA resulted in a windfall for T-Mobile USA and aEURoea misuse of the tool of certificates of insurance.aEUR?

[1] T-Mobile USA Inc. v. Selective Ins. Co. of Am., No. 96500-5, 2019 WL 5076647 (Wash. Oct. 10, 2019).