Claire-ification

Are you a member with a question? Contact IA&B VP-Advocacy Claire Pantaloni, CIC, CISR to find the answer at 717-918-9202 or ClaireP@IABforME.com.

QUESTION:

Does the agency have a responsibility to ask the insured if they have a written agreement requiring the holder to be listed as an AI?

ANSWER:

When providing a Certificate of Insurance (COI), it is best to stay away from describing, restating, or interpreting the coverage. From a best practices standpoint, the preferred method is to use generic language and simply attach the blanket Additional Insured endorsement form to the COI. Writing something along the lines of “Additional insured status is granted as provided in and to the extent of the attached endorsement” might accomplish that goal. The wording simply refers to the endorsement but stays away from interpreting the policy and giving direction to the insured. This puts the burden on the insured’s certificate holder to make sure the specific requirements in the endorsement were met, including the existence of a written contract.

More generally, it is not the agent’s responsibility to review contracts and/or to opine on what is needed outside the insurance policy or to alert customers of everything in the policies or endorsements. If you do so, you may find yourself creating a duty where none exists. When you choose to highlight certain areas of the policy and not highlight others, you can make your agency more vulnerable, particularly when a claim occurs in an area you chose not to draw attention to.

Finally, proper handling of certificates includes use of a current form, and no alteration of the form. It is also good to know that if you are using ACORD forms, which is likely, remember that each form comes with a Form Instruction Guide (FIG) which should be accessible through your agency management system or through your ACORD subscription. The FIG gives guidance on each field to be completed on the form, something that can assist agency staff, ensure consistency among them, and avoid errors.

This document is not a legal opinion and should not be relied upon as such. The intent of this document is to provide a general background regarding the topic or topics discussed, not to provide legal advice. Producers and agencies should consult an attorney regarding specific situations and specific questions with respect to the topic or topics covered in this document. Neither the Insurance Agents & Brokers nor any of its employees shall be responsible for any errors or omissions regarding any statements made in this document, nor any errors or omissions regarding any statutes, regulations, court rules, and/or any other government documents cited in this document.