RISK MANAGEMENT
For example , a contract might require that the certificate requestor be named as an additional insured ( something the insurer may or may not be willing to do ), be provided notice of cancellation ( something rarely afforded to additional insureds in an insurance contract ), or be provided with a type of coverage ( e . g ., completed operations ) that the insurer cannot or will not provide . Such contracts may specify certain endorsements by form number and edition date that the insurer cannot provide because new editions have superseded them , and the older ones have been withdrawn .
As a result , agents are sometimes asked to produce a certificate that cannot comply with the contract the insured has signed . Agents are often faced with the claim from the insured or certificate requestor that they know of agents who can or will provide such certificates . Failure to do the same could mean the loss of an account for the agency . These unreasonable requests too often lead to the issuance of fraudulent certificates by insureds or agents .
One other issue is the “ will endeavor to ” cancellation wording that very few insurers follow . The language has the potential to become a legal problem , though right now , it ’ s more often considered one of ethics . Is it ethical to provide a certificate that says the insurer will attempt / try ( i . e ., “ endeavor ”) to provide cancellation notice when it ’ s clear that the insurer has no intention of doing so ?
Issues and Answers updates can be found at http :// www . iiaba . net / VU / NonMember / Certificates . htm , along with a number of related documents and articles .
The issue of onerous insurance requirements is mostly an educational one . From the standpoint of many businesses and governmental entities , it doesn ’ t hurt to ask for the moon , even if you know you won ’ t get it . As one attorney opined , “ I ask for everything I can get . It ’ s the other guy ’ s responsibility to say ‘ no .’” In many instances , these organizations ask for concessions for which there is no insurance product in the marketplace . They ask because they have the leverage to do so . Unfortunately , some agents will indicate ― usually by a certificate of insurance ― that their insured complies . It could be that the additional insured isn ’ t concerned , knowing that the agent ’ s E & O insurance provides a backstop .
Often organizations will ask for coverages out of ignorance . Contracts may specify additional insured endorsements that are dated over 20 years ago . If a company ( or ISO ) has filed a new endorsement and withdrawn an older one , the carrier cannot legally provide the older form without refilling it . However , some agents will indicate on the certificate of insurance that the form or its equivalent is being provided .
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