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Should You Issue ‘Blank’ Certificates of Insurance?

Can you fulfill a contractor's request for a certificate of insurance without a certificate holder name so they can provide it as proof of insurance?
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A contractor asks an agent for a certificate of insurance without a certificate holder name so he can provide it as proof of insurance. The agent says they will issue a COI to anyone at the contractor’s request, but can’t provide one for him to hand out, as has always been the policy.

Q: "Is this the appropriate procedure? He is a new insured and claims another agency has done this for him for 20 years."

A: “Many people have submitted questions lately regarding the propriety of issuing ‘blank’ certificates at an insured’s request. First, I can’t imagine an upstream party accepting a COI directly from the downstream party, especially if the date is old.

Second, check your agency/company agreements and supporting underwriting documentation, or contact your underwriters directly. Some agency/company agreements specifically prohibit this practice. If a lawsuit develops from this practice, and if the insurer is stuck with it, the insurer is likely to file an E&O claim against the agency for failure to follow contractual requirements.

Keep in mind that only an ‘authorized representative’ of the insurer can issue a COI to third parties. The signature line is in the lower corner of the ACORD form. The insured is not authorized to certify insurance coverages and limits to their business partners—only the carrier and agency. In addition, governing state laws, regulations or Department of Insurance directives may control this practice.

I’ve seen insureds abuse this practice before. In a couple instances, the agency issued a COI without naming a certificate holder. The insured not only issued their own COI to varying parties, they also changed the date on the certificate to imply all the information was still accurate. In at least one of these cases, the agency had signed the original ‘blank’ certificate, confirming the accuracy of the information on the COI.

In short, when an insured requests a COI with no certificate holder name, don’t do it.”

Bill Wilson is director of the Big “I” Virtual University.

This question was originally submitted by an agent through the VU’s Ask an Expert Service. Answers to other coverage questions are available on the VU website. If you need help accessing the website, email to request login information.

Tuesday, September 27, 2022
Commercial Lines
Virtual University