CertificateRequest Forms for Commercial Liability-CA

[SDbroker]

I am a CSA and supervisor for the service dept. for a commercial brokerage and have been getting a lot of resistance from some of the brokers and clients for requiring that each request for an additional insured cert./endt. be in writing and specifically that they complete one of our company certificate request forms. We require this of all additional insured requests, even for renewal requests or if they have faxed us specific insurance requirements from the entity to be added as anA/I, we still want the request form completed. We also require that the request form be completed by the insured or the broker, only. We do not accept requests from any one over the phone and we do not accept requests from anyone that was an additional insured on a previous policy that has since renewed who would like to be added to the new policy.
Does anyone know if there is a specific code or law that specifically deals with this topic. I'm tired of being questioned as to why we do this but I don't know what the exact regulation or code is.
In California, you are required to have a request to add an additional insured to the policy in writing, correct? It's just like any other PCR, right?

[LadyBroker]

I would be surprised if there is a part of the code that outlines exactly how a certificate must be requested. Be serious, the gov't can't keep track of it's own self, but you want them to advise you on Best Business Practices?

However, here is something you should keep in mind --- it doesn't matter how many forms are completed, or signatures you have in file, if there is an additional insured requested, especially for a contractor, and there is no written contract, then no AI is granted by the carrier. Remember, all you can do is allow AI's and certs as the policy language allows, you cannot broaden or expand coverage. your carriers do not care one tiny little bit about your cert request forms...all they care about is that the certificates and AI's that you issue on their behalf be accurate. If your certs or AI's are not accurate, the carrier will not honor the claim that will follow on the job, and then guess what...you get to find out how much of an E&O deductible your firm's coverage has.....

It sounds to me as though your certificate processes are a bit onerous, and you are getting push-back from your client base. You may want to consider streamlining your processes, not asking for a new regulation to justify them.

If you are a wholesaler, you should not be issuing AI's or certs...and I can't tell from your post, as you mention dealing with brokers and clients.

Only my opinion...so take it for what it's worth!

[doyourhomework]

Excellent post, LadyBroker.

Only one last thing: some carriers [e.g. Landmark, Mt Hawley] don't want copies of certificates of insurance. Ignore that and send them to the carrier or your wholesaler anyway. If a certificate is issued incorrectly and you do not catch it, then its the carrier's responsibility if it is in their hands. Main rule of certs is that you do not want to be the last person holding the bag. Seems disingenuous but its saved our collective butts many many times.

[SDbroker]

DO you require a PCR to be in writing from the insured or do you just let anyone make a request to change a policy?

[rcenters]

Does sending a copy of a certificate to a carrier, against their will, that most likely contractually obligates you to issue accurate certificates, does that truly place any of the responsibility back on them?

[d's insurance store]

As a retail agency, I always ask that cert requests be put in writing from my insureds or the requesting party, mostly because I got tired of taking phone information and then having it come back because a name or address or zip code was slightly off and then having to resubmit and reissue.

I think that insureds, mostly the smaller contractors, just assume the issuance of a cert is nothing more than notification that they have coverage, and there is no connection that this request is a legal connection from the carrier to the insured. I also think that in this internet, on line day and age, many insureds think it's no big deal to just type a few letters into the computer and, poof, out pops a certificate.

Many times, the insured/client has no idea as to what an agency goes through because from the client side of the desk, everything moves quickly and efficiently and we make the job look easy. I'm not advocating that we spend our days moaning and groaning to the client about what goes into our workload...after all we are compensated for our work, but sometimes we can make things look like we don't do much work for the outcome that the client views.

And of course, there's the oft mentioned issue that shows up here from time to time about the agency compensation for those low premium/commission commercial accounts that require a bunch of certs over the course of the policy year and the broker fee + commission doesn't come close to the actual cost plus profit to do the work. Someone recently posted a comment in this forum about letting those accounts go elsewhere because they turned out to be big time money losers when the workload was totaled up against total revenue.

[CATHIEA]

We also require written requests for certs and A/Is. Two reasons,
1- they have all the required info for the cert / AI and you get the info correct.
2- If it's faxed over by the owner/manager/etc it's easier to collect the premium.

We require any change to a policy to be sent over in writing. So far I haven't had a client complain about it.

[SDbroker]

Ladybroker, I was under the impression that only the blanket form A/I's require a contract to be in force between the insured and the A/I for there to be coverage. I was not requesting that a new code be written to satisfy my obviously selfish needs. Be serious, our government can't even agree on regulation regarding our borders let a lone a silly law about faulsified changes to an insurance policy.

Thank you all for your responses. I guess I didn't make myself clear when I said I worked for a commercial brokerage, but the information provided by CATHEIA and D's Ins. Store was exactly what I was referring to for procedural advise. Thanks again!

[kheller26]

I am not affiliated with any insurance companies whatsoever, BUT, am a victim of faxed Certs of Ins. WC. They are being prosecuted down to the bottom. So, I would do my best just to C.Y.A.

Sincerely,

[Big Dog]

SDBroker

Having recently left a large brokerage firm's "service center" for the client side, having a certificate request, especially one asking for AI or WOS, in writing protects everyone - the agency, carriers and the clients.

Some clients have a hard time completing forms (no matter how simple they are), but they should understand the concept of proper documentation.

Having guidelines in place as to who and how you'll accept certificate requests is a good thing. You definitely don't want to have a vendor of an insured being the one that requests an AI or WOS. Thos should only come from the insured. Many clients I handled specifically dictated that certificate request should ONLY come from them, and any outsiders should be directed to the client.

[cid]

I think it is great and all to require cert requests in writing; the question is, do you require all pertinent information in writing before issuing the certificate? For example, do you actually require them to state whether additional insured status was required by contract? If not, and you issue additional insured status on cert that written request probably won't back you up, I think.

However, question for those who may know - what if you always state on your certificates "if a written contractual request has been made for additional insured status". If you do that does it perhaps relieve of some of the responsibility to actually verify if a contract is in place, does it place the responsibility on the certificate holder? Or at the time of a claim with no AI status, could they claim they aren't lawyers or insurance professionals and that they can't be blamed for not understanding that language?

[Big Dog]

We would definitely require, in writing from our client, if AI and/or WOS wording was to be included. This was done to protect the agency and act as backup proof of the request.

As to includinng "as required under written contract", this does protect the insured in case there isn't a written contract in place. In case of a claim, the decision whether or not the AI wording is enforcable is left to the legal system.

A good agent will provide their clients with a basic understanding of what the AI and WOS wording does actually do, which will help them when negotiating contracts.

Now that I'm on the client side, we carefully go over every contract as respects to the insurance language, and make any necessary changes.

[SDbroker]

Cid, part of our problem is that our request form is very specific and detailed regarding the information we request. We definitely ask if there is a written contract between the insured and the a/i.
The certificate itself is simply there to provide information regarding the policy and the insured and in no way a "binding" document. However, we are very careful of the information we do add to the certificate, to protect our E&O. Only the a/i endt. issued by the carrier can bind the policy to include the add'l insured status. No matter what we put on the certificate, the carrier is not bound to uphold anything on it, that would fall back on our agency and again, our E&O. There is a statement on the back side of the certificate and the upper right hand corner that also provides this information.
Considering our agency deals with Contractors as well as any other commercial business, we understand the importance of veryifying all carrier's specific guidelines and exclusion for add'l insureds. We are very fortunately to have long time working relationships with many of our underwriters so we know we can always contact them for out of the ordinary a/i requests.
As a broker myself, I am very thorough with my clients and give them the option to send me their standard contract to review and any certificates and a/i endt. they collect from their subcontractors and vendors.
The A/Is are definitely the most time consuming and difficult areas of my business, especially since every law suit that is settled or appealed can change the way a carrier issues or words their endts. Never ending cycle of new improvements and exclusions. By I do my best to make sure we stay on top of them all. I just wish the brokers and clients I worked with understood the risk involved with issueing a/is and why its necessary to have the request in writing. Thank you all for your responses.

[etimer]

An additional insured's coverage operates independently of any other contractual agreement""it is not tied to the indemnity agreement in the construction contract, although courts will sometimes look at the contract to determine the intent of the parties. The additional insured endorsement, therefore, must spell out the scope of the additional insured's coverage.

So I am not sure what your statment means: <if there is an additional insured requested, especially for a contractor, and there is no written contract, then no AI is granted by the carrier. >

Maybe I am reading soting into your statment that you didn't mean.

I would be surprised if there is a part of the code that outlines exactly how a certificate must be requested. Be serious, the gov't can't keep track of it's own self, but you want them to advise you on Best Business Practices?

However, here is something you should keep in mind --- it doesn't matter how many forms are completed, or signatures you have in file, if there is an additional insured requested, especially for a contractor, and there is no written contract, then no AI is granted by the carrier. Remember, all you can do is allow AI's and certs as the policy language allows, you cannot broaden or expand coverage. your carriers do not care one tiny little bit about your cert request forms...all they care about is that the certificates and AI's that you issue on their behalf be accurate. If your certs or AI's are not accurate, the carrier will not honor the claim that will follow on the job, and then guess what...you get to find out how much of an E&O deductible your firm's coverage has.....

It sounds to me as though your certificate processes are a bit onerous, and you are getting push-back from your client base. You may want to consider streamlining your processes, not asking for a new regulation to justify them.

If you are a wholesaler, you should not be issuing AI's or certs...and I can't tell from your post, as you mention dealing with brokers and clients.

Only my opinion...so take it for what it's worth!

[hannah]

doyourhomework IJ addict

You are wrong about the responsilbity of the carrier. COIs convey no coverage and if a carrier does not want them, they do not keep them. They are most likely tossed with no review. You are wasting time and paper. Read the language at the top of each cert.