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CERTIFICATES OF INSURANCE: FAQS AND ANSWERS Certificates of insurance (COIs) account for more headaches at the agency level than just about any other issue. Because COIs create so much angst, the Big “I" Virtual University regularly hosts webinars about them. Here are the answers to many of the frequently asked questions: Q: Once you have reviewed the request and executed the COI, how do you advise your insured on what can and cannot be done regarding the insurance requirements held within the specific contract? A: You can only consult on the insurance requirements in the contract. When you get a contract to review—hopefully before it's signed—you should schedule a meeting with your insured to lay out what is in the contract and what can and cannot be done from an insurance standpoint. Some requirements can be met by endorsement, some can't regardless of what you do. Your job is to explain to the insured what is available and let them make the business decision. Q: What are the policy aggregate, per project and per location checkboxes in the general liability section of the certificate? A: The policy aggregate is the standard policy aggregates based on the coverage. Per project and per location aggregates are triggered by the attachment of endorsements. If the CG 25 03 Designated Construction Projects General Aggregate Limit is attached, the general 24 | APRIL 2022 |
wisconsin INDEPENDENT AGENT
aggregate applies per listed project. Some carriers use a “blanket" description. For example: “All construction projects undertaken by the named insured". This endorsement is an ongoing operations limits endorsement. If the CG 25 04 Designated Locations General Aggregate Limit is attached, the general aggregate limit applies to each insured location. These are locations that are owned by, leased or rented to the insured but are not locations at which the insured is working. This endorsement is a premises liability endorsement. Q: If a policy is pending cancellation due to non-payment, but the certificate is requested before the cancellation date, should you still issue the certificate while in pending status? A: Technically, you can because a COI is a snapshot of coverage in effect on that day but it creates a distinct problem for you on a couple of fronts. First, do you call the insured to discuss the pending cancellation? If you do, you may have created another problem for the agency if you don't call all insureds with pending cancellation. Second, if you issue a COI without a warning to the holder, are you guilty of creating a detrimental reliance? Because the COI is a representation of the policy in effect on the date it is issued, it seems acceptable and even required to note in the Description of Operations that cancellation is pending effective MM/DD/YY.
