Recently, a question came up in the CPCU member forum about the ACORD 25 Certificate of Liability Insurance. It’s the same question I’ve been getting for at least 20 years and the answer hasn’t changed during those two decades or more.
Pretty much the same question was posed a few days later to Tim Dodge, AU, ARM, CPCU, Assistant VP of Research and Information for the Big “I” of New York:
“I have a commercial lines client who has a $5,000,000 umbrella policy with us. The insured does not want us to show on certificates that he has $5,000,000 of excess coverage. He would like us to show on the requested certificates a $2,000,000 umbrella policy. The insured just bumped up his umbrella for one client. The umbrella policy has always been $2,000,000 and he will be changing the coverage back to $2,000,000 at renewal. Is this something that I can do?”
If you have 4 minutes and 25 seconds to spare, here is Tim’s video response:
Tim is exactly right. The ACORD Forms Instruction Guide says that the limits shown on the ACORD 25 should be the POLICY limits. A certificate of insurance “certifies” the broad terms of the POLICY, not the insurance requirements in a third-part contract.
Most states today have COI-specific laws or regulations that make it illegal to misrepresent the terms of an insurance policy. Arguably, showing limits less than the actual policy limits is a misrepresentation. If an insured doesn’t want to share the full policy limits with a certificate holder, in most states you can advise your customer that you can’t legally do this.
The following is a state-by-state listing of the statutes, regulations and DOI directives regarding certificates of insurance:
For more articles on COIs:
Finally, here is a related story from Coverager:
If this can be done for mortgage companies for homeowners insurance verification, why can’t it be done for certificates of insurance in general??? Imagine the literally billions of dollars this could save over time vs. the manual issuance of COIs: