What is a Certificate of Insurance?
Posted by Cary White on Mon, Nov 08, 2010 @ 02:07 PM
Every year millions of insurance certificates are issued in the United States. Certificates of insurance are documents issued to third parties known collectively as certificate requestors/holders. Insurance certificates can be issued at any time during the policy period, but they are most common around the time of renewal of the coverage listed on the certificate. Each certificate of insurance provides select information about the insurance policies purchased by an insured. Such information generally includes the type of insurance, the policy number, the period of coverage, the policy limits, and the insurance company providing the coverage. Typically, there is room only for one policy per coverage type including general liability, automobile liability, umbrella or excess liability and workers’ compensation.
A Certificate of Insurance is NOT an insurance policy. Insurance certificates do not provide coverage. Insurance certificates also do not endorse, amend, extend or alter in any way the terms of any insurance policy listed on the certificate. Notes, descriptions, contract numbers or references to contract provisions on the insurance certificate do not provide coverage. Only an endorsement, rider or amendment to the policy issued by an authorized representative of the insurance company can change the coverage.
Insurance certificates are common in many industries including construction, manufacturing, retail and property management. Insurance certificates are often required by property owners, contractors, landlords, lenders and others. The ACORD 25 Certificate of Liability Insurance is the most common type of insurance certificate, but there other Acord insurance certificates for specific industries and to reflect additional coverage types including:
ACORD 20 - Certificate of Aviation Liability Insurance
ACORD 21 - Certificate of Aircraft Insurance
ACORD 22 - Intermodal Interchange Certificate of Insurance
ACORD 23 - Automobile Certificate of Insurance
ACORD 24 - Certificate of Property Insurance
ACORD 25 - Certificate of Liability Insurance
ACORD 27 - Evidence of Personal Property Insurance
ACORD 28 - Evidence of Commercial Property Insurance
ACORD (Association for Cooperative Operations Research and Development) is a nonprofit organization serving the insurance industry and related financial services industries. ACORD is a member run organization dedicated to improving the flow of insurance information. ACORD members include hundreds of insurance and reinsurance companies, agents and brokers, software providers, and industry associations worldwide.
More information on ACORD Certificates can be found in the FAQ on U.S. ACORD Certificates or at the ACORD Website.