Last week I was asked for my opinion on a certificate of insurance (COI) issue. The agency permits customers to order/issue certificates of insurance through AMS and their Client Portal or, for more complex requests, through EBIX. The customers are allowed to modify the Description of Operations field. Is this OK?

The short answer is “No!” In fact, the LONG answer is “No!” Period (or, rather, exclamation point). In the inquiry, the agent gave an example of where the customer writes in that “XYZ” is an additional insured and waivers of subrogation are provided but they really aren’t. That’s why the answer to the question of whether this is OK is “No!”

In the past, I’ve written about some online COI systems that allow someone other than the agent to modify the COI on file. One system allowed the insured to modify the Description of Operations. Another system was even worse, allowing the certificate holder (the insured’s customer) to enter a list of additional insureds in this field. Needless to say, information could easily be entered that implied that the COI amends, extends or alters the policies. This is almost certainly illegal in every state that has passed laws or regulations regarding COIs and quite possibly illegal under unfair trade practices or other laws in every state.

ACORD COIs have an “Authorized Signature” line for a reason. Somewhere in the agency/company contract or underwriting guidelines or supporting documentation for many, if not most, insurers is something addressing COIs. Allowing a customer or even one of their customers to modify a COI is an E&O claim waiting to happen and quite possibly a violation of the agency/company agreement(s) and/or state laws, regulations, or insurance department directives.

Do NOT use ANY system, in your shop or an outside online vendor, that allows anyone outside the agency or carrier to modify the content of a certificate of insurance. Make sure that any such feature or option is turned OFF.

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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information