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In 2015, a new Massachusetts law went into effect regarding certificates of insurance.  This legislation, MGL Chapter 175L was enacted to legally clarify that insurance certificates do not and cannot modify the terms or conditions of the insurance policies they evidence. Yet, a year later, instances still occur where businesses or their clients appear either confused or unaware of the law. As a review, here are the key points:

  • A certificate of insurance encompasses any document or instrument evidencing property or casualty insurance coverage issued by an insurer or insurance producer;
  •  A certificate of insurance may not “amend, extend or alter the coverage afforded by the policy it evidences;”
  •  A certificate cannot create any new or additional rights outside the referenced policy;
  • No one may knowingly prepare, issue, request or require any false or misleading information in the certificate of insurance concerning the policy;
  • No one may prepare, issue, request or require certificate that purports to affirmatively or negatively reference insurance outside the coverage provided by the underlying policy;
  • A certificate of insurance may not warrant that any insurance or indemnification requirements of a contract are fulfilled by the underlying policy of insurance;
  • A cancellation notice reference on the certificate of insurance does not create any right to receive notice of cancellation, non-renewal or material changes to a policy unless the terms of the policy or endorsement so provide.

The law applies to insurance on properties, operations or risks located in Massachusetts, regardless of where the certificate holder, policy holder, insurer, or insurance agent is located. Those who request the issuance of an improper certificate can be fined up to $500 per violation; therefore, everyone needs to understand and comply with MGL Chapter 175L to avoid be such situations.

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The information provided in these articles are only general descriptions and should not be relied upon as complete, correct or accurate for your specific situation. All coverage informaiton is subject to policy provisions, endorsements and may be  subject to your meeting underwriting qualifications. Murphy Insurance Agency is not engaged in rendering legal, accounting or other noninsurance professional services. Consult an appropriate professional for advice regarding your own situation.