Q: What’s the best way to let certificate of insurance holders know that a commercial liability policy has been cancelled?
Response 1: It is not the agent's responsibility to notify COI holders about a policy cancellation. The only notification requirements are those contained in the policy between the insurance carrier and the insured. The agent is not a party to that requirement.
If you undertake notifying COI holders in this way, you create major problems for yourself. If you already agreed in writing to do so, you’ve already created those problems.
Remember, a COI is a snapshot in time. It’s only good the day it was issued. Don't notify COI holders of anything, and don't agree to do so.
Response 2: The policy contains no requirement to notify a COI holder of anything. If you take it upon yourself to notify COI holders of a policy cancellation, you better do it with every COI holder, on every account, every time.
Response 3: The agency has no obligation to notify the COI holder. If you voluntarily take on this task, you significantly raise the "duty of care" you owe your client. It's ripe for disaster.
If a COI holder requires notification of cancellation or non-renewal, endorse the policy to accomplish this.
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, request login information.