Thrid Party Cert Managment Wants to Be cert holder

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etimer
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Thrid Party Cert Managment Wants to Be cert holder

Post by etimer »

I recently received a requests to send certs to a third party administrator of certs. I prepared the cert and accompanying package of endorsements as I always do.

I received an e-mail back saying that the WC doesn't meet statutory requirements. Hm? The contract requirement is 100/500/100. My client carries 1 million across the board and it was stated on the COI. I resend the COI saying they meet the WC requirements.

Then the third party goes on to say that my client doesn't have the general aggregate Limit per Project. I re-send the endorsement showing that they have the per project on a blanket basis.

They e-mail back and accepted the above.

Now they want their name and address as cert holder? Why is there something rolling around in my early morning cobweb mind that is firing off a problem alarm? So if the contract requires 30 day notice of cancel etc. (added by endorsement) in case of cancellation shouldn't the cert holder name be the prime contractor? I mean the contractor can at anytime change third party cert admin people and if the need arises to send notice to the contractor the cert holder address wouldn't be the third party admin people.

Since Certificate Holder is the party to whom the COI is issued, shouldn't the Cert Holder read the contractor who requests the certificate so that the my client can get on the job site?

I just thought of something and that is the ex-dates on the certs. A third party could start a lucrative lead business by gathering ex-dates and selling them. I've added a line - "Expiration dates are private information and shall not be sold or used by anyone other than the certificate holder.".

I need to think about this one?
Big Dog
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Re: Thrid Party Cert Managment Wants to Be cert holder

Post by Big Dog »

Most third party cert management companies will have the COI come to them, vs. going directly to the actual Certificate Holder. We (a large hospital system) looked at several of these vendors and decided not to use them because of this issue - i.e. they take over all of the processing and such (we were looking for just a simple database system).

This was also one of our concerns - ineptitude upon the cert management service's part.
etimer
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Re: Thrid Party Cert Managment Wants to Be cert holder

Post by etimer »

I was hoping you would respond because I remember you work for a hospital.

The person requesting the COI is a large national construction company with const companies that work under different names. I called the Const company to voice my concerns and we reached a decision for cert holder.

1. Add the third party cert company using c/o and address
2. Add the address of the company that offered the contract and their home address

I gave an example of one concern to the person I spoke with at the const company. Went like this - "the contract wants a 30 day notice of cancel endorsement and I send the COI to the insurance company. "If they need to send the 30 day notice they will look for direction from the cert holder. Now if in 6 months you have changed cert holders, if cert holder's address was on as cert holder, the insurance company will fulfill their legal requirement and send notice to the address of the third party cert admin." The person on the phone said --- "well it is unlikely we will change cert administrators." I said well insurance is based on the unknown, things happen and it is all done to control the unknown. The unknown is that you don't know if you will have the same 3rd party vendor in 6 months.

I decided to produce some language that I will use on all third party COI vendors - I placed this on the cert -- " Expiration dates are private information of the Insured and shall not be disseminated or distributed outside the intended use of a Certificate of Insurance."

Personally I think that keeping control of the COI in house is a better way to handle the situation. I was reading on one insurance forum where one guy thinks that there could be HIPPA problems. I don't agree.

Clearly the cert management company didn't read what I sent them. If they had read it they would have seen that the WC coverage was a lot more than what was needed in the contract and the per project aggregate was covered. I'm wondering if it is like the computer telephone support. You call the support number and they go by a script. If you lead them off the script, they get lost and confused. DO the people handling the certs at the vendor know what the insurance jargon / request means or are they just reading the script?
Big Dog wrote:Most third party cert management companies will have the COI come to them, vs. going directly to the actual Certificate Holder. We (a large hospital system) looked at several of these vendors and decided not to use them because of this issue - i.e. they take over all of the processing and such (we were looking for just a simple database system).

This was also one of our concerns - ineptitude upon the cert management service's part.
Big Dog
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Re: Thrid Party Cert Managment Wants to Be cert holder

Post by Big Dog »

I'm assuming that, since you're dealing with a large national construction company, there are insurance requirements built into the Agreement form. Ask for a copy of those insurance requirements because that's what dictates your client is obligated to provide. Anything beyond that - "NUTS"
etimer
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Re: Thrid Party Cert Managment Wants to Be cert holder

Post by etimer »

I read all contracts and I also read the one in question. It is an AIA A401contract and all insurance requirements are met. The request for who is to be named Holder is fluff and not a contractual obligation.

My State DOI has an informational piece that writes what a COI does and doesn't do. Sometimes I'll send the PDF of the DOI piece to let someone know that a COI isn't some magical piece of paper.

What we all know is that the COI is a summary of the insureds insurance contract....not really anything more than that. The DOI is a full page and this is one " "certificates do not in any context amend, extend or alter coverage of the insurance policy. They simply summarize the coverages provided by that policy. "

I am always a bit amused when I see a request that for the COI to be valid it has to name the job number and job name. I can see it a bit for COI administration but I somehow think that the request assumes that by adding a job number and name adds some hidden insurance coverage to that particular job.

I have an account that the CGL and BAP renew in a few days. I produced over 250 Certs last year for my customer that went to about @12 different contractors. To provide notice that my client has renewed with the same insurance company, same endorsements as last year (endorsement copies included) I sent informational update certs to the 8 most used contractors so that they could mark that my client still has the same insurance in force. Nothing changed.

I did receive an e-mail from one contractor requesting that I add a job name and number. Ok...I could go and create a COI for every job that was done last year, without consideration if the job was ongoing or completed. All the people would get inundated by COI's. Next month the WC renews and I could email another big load of COI's. Seems redundant though...I think.

If as my State DOI states, the COI is just to inform that insurance is in force and required endorsements are in force, a COI for every job request from last year would IMHO be over kill. To me it is just a few keystrokes of changing numbers in the computer program and I'll do what ever is needed to make my client happy.


Big Dog wrote:I'm assuming that, since you're dealing with a large national construction company, there are insurance requirements built into the Agreement form. Ask for a copy of those insurance requirements because that's what dictates your client is obligated to provide. Anything beyond that - "NUTS"
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