SilverLink - Winter 2008 - (Page 8)

The purpose of an insurance certificate is to provide proof of, and information about, certain coverages in your insurance program. Certificates are issued without cost and, in most cases, by your insurance agent’s office. Copies of certificates issued by agents are also sent to the insurance companies involved. A Certificate of Insurance may take one of two basic forms: - guarantee that at some uncertain future time, coverages and limits will be the same as they were when the certificate was issued. guarantee anything (most certificates state quite plainly that no guarantees are being made!). - Certificate holders sometimes go to great lengths to create guarantees in the certificates that simply are not there, par1. The first type shows property coverages. This type has ticularly with regard to notification of changes in policy status. three different forms: The certificate forms state that the insurance company will endeavor to notify the certificate holder in the event of cancela. ACORD* Form 24—a short form lation before the expiration dates of the policies. Note that the b. ACORD* Form 27—for personal property verb is endeavor, which, of course, means try. Many certificate c. ACORD* Form 28—a more comprehensive form for holders endeavor to expand that wording to guarantee that commercial property notice is sent or to include such events as termination, reduc* All three ACORD forms state exactly the type of property tion in limits, material change (which is an ambiguous term) insurance that is in force as of the form’s completion date. and non-renewal. Coverages included in these forms are real and personal property and most inland marine lines. Each is provided These events simply cannot be included in the notification to third parties who have both an interest in knowing effort. Agents who change the wording in the cancellation what coverages you have and a reason to expect you clauses of certificates, or who delete the disclaimers accomto provide the information to them. These may include panying the certificates, do so at the peril of becoming liable mortgagees for real property, loss payees for credit lines or personal property, leasing companies for leased equip- for losses on their own authority. By taking this action, they and their agencies effectively become the insurance comment and others. pany. The fact is that there is no clause in any liability policy that requires notice to any Additional Insured or interested 2. The second type is ACORD* Form 25—the Certificate of party other than the Named Insured. Changing the certificate Liability Insurance (COLI), which is used for liability coverwording may make the certificate look different, but it does not ages. The COLI is more commonly requested, particularly change the policy. Property policies with Mortgagee or Loss in the construction industry. It lists one or more casualty Payee clauses are different, with notice of cancellation being coverages, including general liability, auto liability, workguaranteed in those cases. ers’ compensation, umbrella or excess liability, professional liability and others. This form is used to prove that Despite their inability to do everything some recipients want you have the policies and limits indicated in force at the them to, certificates are important documents nonetheless, time the certificate is prepared. and can be valuable in case of a loss. All certificates should be filed and a suspense file should be established for follow-up Misconceptions can arise because certificate holders may when the certificates expire. Not only will your premium audinot understand what the certificate represents. Following are tor want to see them at audit time, but they will be immensely some specifics regarding what certificates do and don’t do for helpful in the event of a loss. We recommend keeping the those who request them: COLIs in your file for at least three years (five years is better) • Certificates do show the coverages that exist at the time of beyond their expiration. certificate issuance. • They do not: constitute a contract of any kind between the carrier, the insured, the agent, the certificate holder or any combination of these individuals. affect the terms or conditions of the policies. have any force or authority to change or amend the policies they show. * Your agent or broker should be able to answer any questions you may have about the certificates specific to your policy or policies. Do not hesitate to contact him or her for further information or clarification. ACORD is a forms standardization company for the insurance industry - contact kirk johnson at 402.96 4.5732 or kjohnson @ ssgi.coM 8

Table of Contents Feed for the Digital Edition of SilverLink - Winter 2008

SilverLink - Winter 2008 Contents Risk Management: Where in the World is Human Resource Consulting? Workers’ Compensation Rate Declines Insurance Certificates Haute Retirement It All Began with a Cup of Coffee Playing Fair in the Housing Market Captives 101 Proceed with Caution Fore! (Or is it Pull? or Giddyup?) Don’t Be Fuelish Employee Benefits: Medical Trend Countdown to Compliance Private Client Services: Buy & Sell Agreements Flood Insurance Pushing Wealth to the Next Generation Client Spotlight: Travel and Transport Internal Happenings: SilverStone Group Giving Back Since 1945

SilverLink - Winter 2008

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