8 Tips for Handling Certificates of Insurance for Your Clients
While Protecting Your Agency 

Certificates of Insurance (COIs) play a critical role in verifying the existence and details of insurance coverage for clients, vendors, and third parties. As essential documents, their accurate preparation and issuance can help prevent costly misunderstandings and liability exposures. However, the process requires attention to detail – and oversights or missteps can lead to claims and administrative complications. To help agencies navigate these complexities, it is crucial to understand and implement best practices when issuing certificates of insurance. 

1. Verify that coverage is in force before issuing a certificate of insurance. The most common reason we see claims related to COIs is their issuance when coverage is not in force. Has coverage been cancelled? Was the renewal bound? Ensure you keep your agency management system up to date as many of these errors are a byproduct of inaccurate information in the agency management system. 
2. Do not issue a certificate of insurance listing an additional insured that has not yet been approved by the carrier. Even if the carrier will traditionally approve the additional insured without issue, it is best to wait until they provide formal approval before providing the COI. 
3. Check for any endorsements that modify coverage and be sure they are noted on the certificate of insurance. 
4. Do not add non-standard language to a COI without having it reviewed and approved by the carrier first. 
5. Never provide a blank, signed certificate of insurance to a client for them to fill out themselves. 
6. Do not just duplicate a prior-year COI. Review the current coverage to make sure that you provide current, accurate information. 
7. Include a formal, written process for handling certificates of insurance in your procedure manual.
8. Assign specific employees to handle COIs and have a two-person review process to confirm the information is accurate before the COIs are released. Audit employees regularly to ensure adherence to the procedures and accuracy in processing.

Help Safeguard Your Agency
By adhering to these best practices, agencies can help safeguard themselves against unnecessary risk while delivering reliable service to their clients. A thorough, standardized approach promotes trust and professionalism – and can help prevent costly errors and liabilities. Through diligent verification, clear procedures, and ongoing audits, agencies can be certain that every certificate of insurance issued stands as a true reflection of coverage – benefiting clients and the agency itself. 

E&O Tip: PROTECTIVE SAFEGUARDS – A Longstanding Source of E&O Claims  

Commercial Property and Businessowners (BOP) policies often contain a protective safeguards endorsement. Protective safeguards can include an alarm system, sprinkler system, security service, and a commercial cooking exhaust and extinguishing system. While having these systems in place can result in a discount for clients, they can also result in an uncovered claim if they are not maintained.

Why is This a Concern for You?

Clients will often pursue the agent after discovering a claim will not be covered. Frequently, the client will indicate that they provided different information to the agent than what was provided to the carrier. Alternatively, they will claim the agent failed to advise them of the requirements surrounding protective safeguards necessary to avoid a coverage denial.

What Should You Do?

•  Err on the side of caution. Leave these safeguards off when generating an initial estimate if you don’t have clear information indicating that they are in place. It is better to advise the client that additional discounts may be available if they have safeguards in place than to assume they are to present a lower premium. 
• Have the client confirm in writing that the safeguards exist. Whether it’s a signed application or simply an email, it’s critical to document it. Did you fill out the application for the client? Have them initial the questions surrounding safeguards in addition to signing the application.
• When quoting, advise clients to review the provisions surrounding protective safeguards. Suggested disclaimer language:

“This quote includes a protective safeguards endorsement, which requires specific protective devices or systems (such as fire alarms, sprinkler systems, or burglar alarms) to be fully installed, operational, and properly maintained as a condition of coverage.

Failure to maintain these safeguards, or to notify the insurance company of any known impairment, malfunction, or suspension, may result in denial of coverage for losses related to the affected peril.

Please review the endorsement carefully and ensure that all required systems are in place and function as required. If you have any questions or concerns about these requirements, or if you are unsure whether your current systems comply, please contact us before binding coverage.”

Top

RISK MANAGEMENT RESOURCES HIGHLIGHT: Disclaimers

Disclaimers can be a vital tool in the agent’s toolbox to help protect your agency against E&O claims. Our risk management website features a section of suggested disclaimers. 

•  Access the site by logging into our online Customer Care Center and clicking the “Risk Management” link. Disclaimer examples are located under “Agency Tools.” 
• CLICK HERE for instructions on how to sign up for and access Customer Care.
  
  

Ready to Help

Are you looking for risk management guidance on a particular topic? Reach out to Tabitha DeGirolano of our E&O team for help at tabitha.degirolano@uticanational.com.

This information and any attachments or links are provided solely as an insurance risk management tool. They are derived from information believed to be accurate. Utica Mutual Insurance Company and the other member insurance companies of the Utica National Insurance Group (“Utica National”) are not providing legal advice or any other professional services. Utica National shall have no liability to any person or entity with respect to any loss or damages alleged to have been caused, directly or indirectly, by the use of the information provided. You are encouraged to consult an attorney or other professional for advice on these issues.