Insurance Certificate Notice of Cancellation Conundrum
Many certificate holders want 30 or more days notice of cancellation in the event of cancellation of the coverage listed on a certificate. Such notice is entirely understandable. Every insurance certificate is only a record of the insurance purchased by the named insured when the coverage was bound (as of the effective date). It is entirely possible that a certificate holder may request, receive and accept a valid insurance certificate only to find out later that the coverage had been subsequently cancelled or the insurance limits had been eroded or exhausted by a claim.
Certificate holders that want notice of cancellation generally specify such notice in their insurance requirements. Traditionally, most have relied on the cancellation clause on the ACORD 25. Many have also requested amendments to the standard cancellation clause despite the fact that the old ACORD 25 certificate of liability insurance clearly stated that it was a matter of information only and did not endorse, amend, or altered the terms of the insurance policies on the certificate.
Prior to the ACORD 25 2009, the ACORD 25 cancellation language was confusing: