If your company is required to provide proof of liability insurance as part of doing business, you have probably requested a standard ACORD Certificate of Liability Insurance. The insurance industry is now using a recently revised standard (ACORD 25) certificate, which has some language changes that could impact you.
A Certificate of Insurance is a document that simply provides information about insurance policy coverage as of a specific point in time. It cannot change an insurance policy or modify coverage. ACORD (Association for Cooperative Operations Research and Development) is an organization that serves the insurance industry to facilitate the development of standardized policy terms and forms. Most insurance companies and agents use forms provided by ACORD such as the Certificate of Insurance.
Change to Notice of Cancellation
The major change to the ACORD Certificate of Liability insurance is that the Notice of Cancellation cannot be changed to denote a certain number of days notice to the certificate holder.
The new ACORD form text now states: “Should any of the above described policies be cancelled before the expiration date thereof, notice will be delivered in accordance with policy provisions.” Licensing requirements and other restrictions prohibit agents from editing the form to add verbiage such as “30 days notice of cancellation”.
What you need to do
No one is happy when a payment is withheld after a job is completed because your insurance program didn’t actually include the coverage or wording required in the contract. The best way to avoid this situation is to send us a copy of the insurance requirements prior to signing a contract. If your program doesn’t have the actual required coverage, options include:
- We can try to arrange the particular coverage required, or,
- You can negotiate out restrictive terms and conditions where practical, depending on the nature of the work to be performed.
When you are preparing to sign a job contract, you need to pay close attention to the insurance terms required. If specific notification of cancellation requirements are in the contract, it should be a red flag to contact us. Murphy Insurance’s use of ACORD 25 is standard in the industry. We have developed a one-page summary that you can provide to help educate certificate holders who request special cancellation wording.
As always, please contact your service associate for assistance if you have questions.