A Q & A ON CERTIFICATES OF INSURANCE presented by the Big I Virtual University Faculty
Certificates of insurance account for more headaches at the agency level than just about any other issue . Because COIs create so much angst , the VU regularly conducts webinars regarding them . Out of these webinars comes questions . In this article we attempt to answer many of these questions .
Q : Once you have reviewed the request and executed the COI , how do you suggest that you advise your insured on what can and cannot be done with regard to the insurance requirements held within the specific contract .
A : The only sections of the contract on which you can consult are the insurance requirements . When you get a contract to review ( hopefully before it ’ s signed ), you schedule a meeting with your insured to lay out what is in the contract and what can and cannot be done from an insurance standpoint .
Some requirements can be met by endorsement , some can ’ t regardless what you do . Your job is to explain to the insured what is available and let them make the business decision .
Q : Can you please discuss the Policy vs Per Project vs Per Location check boxes on the GL section of the certificate ?
A : The policy aggregate is the standard policy aggregates based on the coverage . Per Project and Per Location aggregates are triggered by attachment of endorsements . If the CG 25 03 ( Designated Construction Projects General Aggregate Limit ) is attached , the general aggregate applies per listed project ; some carriers use a “ blanket ” description ( i . e . “ All construction projects undertaken by the named insured ”). This endorsement is an ongoing operations limits endorsement .
If the CG 25 04 ( Designated Locations General Aggregate Limit ) is attached , the general aggregate limit applies to each insured location . These are locations owned by , leased or rented to the insured , not locations at which the insured is working . This endorsement is a premises liability endorsement .
Q : If a policy is pending cancellation due to nonpayment , but the certificate is requested before the cancellation date - should you still issue the certificate while in pending status ?
A : Technically , you can because a COI is a snapshot of coverage in effect on that day . But technical allowance aside , I think this creates a distinct problem for you on a couple fronts .
First , do you call the insured to discuss the pending cancellation ? If you do , you may have created another problem for the agency if you don ’ t call all insureds with pending cancellation . Second , if you issue a COI without a warning to the holder , are you guilty of creating a detrimental reliance .
Because the COI is a representation of the policy in effect on the date it is issued ; it seems acceptable and even required to note in the Description of Operations that cancellation is pending effective MM / DD / YY .
Q : If an insured has a Blanket Additional Insured Endorsement , do we still need to send the company the certificate holder ’ s information to list them on the policy as an Addition Insured ?
A : Remember , there isn ’ t a “ Blanket ” additional insured endorsement ; ISO promulgated two “ Automatic ” additional insured endorsements ( CG 20 33 and CG 20 38 ). That being said , if the party being requesting additional insured status is included
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