 |
Do Certificates of Insurance Really Do The
Job?
Insured’s are frequently requested by third parties, i.e. contractors,
mortgagees, landlords, lienholders and other types of certificate holders,
to provide Certificates of Insurance (“Certificates”) evidencing
limits and coverages required under the terms and conditions of contracts
or agreements. Unfortunately, notwithstanding contractual requirements and
obligations, all too often, the certificates neither satisfy the needs of
the insured or certificate holder nor to they meet their expectations.
Of the utmost importance is that insureds and certificate holders alike
should be cognizant of the fact that certificates do not amend, extend or
alter the coverages indicated thereon. Coverages and limits can only be
modified via endorsements to the policies themselves.
With the aforementioned in mind, in the event that you are requested to
provide a certificate of insurance to a third party, we recommend the
following:
- Always provide your Insurance Agent or
Representative with a copy of any contract or agreement that includes
insurance requirements and/or obligations.
- Never sign a contract or agreement that
obligates your company or insurance carrier prior to consulting with
your Insurance Agent or Representative.
- If you have contractual insurance
requirements or obligations, always receive assurances from your
Insurance Agent or Representative that your coverages and limits are
either sufficient or that they can be amended to satisfy your
obligations.
In the final analysis, Certificates of Insurance can be misleading or
inaccurate. They should never be assumed to be substitutes for policies
themselves or endorsements thereto. For a myriad of legal reasons and
concepts, e.g. “law of agency”, “third party beneficiary status”,
“privity of contract”, among others, Certificates of Insurance may not
really to the job!
Privacy
Notice
|
