Does Adding Language to a COI Constitute Fraud?

An agent insures a small general contractor that is considering performing work for a large local school system. The school is requesting that the following clause be added to the certificate of insurance:

"The policy(s) will automatically include and cover all phases of work, equipment, persons, et cetera which are normally covered while performing work under the above contract, whether specifically written therein or not."

Q: In particular, the "whether specifically written therein or not" statement bothers me because it seems to be asking us to effectively amend the policy to include coverage for whatever the owner darn well wants the policy to cover. I fear that this sort of request violates state law, in that it is asking me—as the licensed agent—to insert language that changes the policy.

I plan to approach the school board and advise them that their language is tantamount to insurance fraud. Is my conclusion correct?

Response 1: An agent should never add any language such as this to a COI. If the change is absolutely necessary, you should seek an endorsement to the policy from the carrier.  This request, however, is likely to be rejected, as the language is overly broad and potentially troublesome.

Response 2: I would send this to the carrier. You don't want to misrepresent coverage. I had a situation where one state department said they were not subject to Department of Insurance regulations. Don't put yourself in the middle. These requirements apply to your insured. You can only certify applicable coverage. That's why the COI makes so many references to the policy. 

Response 3: It's not insurance fraud—it's a misguided attempt to use the COI to create certainty that cannot be created. A COI can only be used to report what is in the insurance policy, and since this language is probably not in the insurance policy, you can't put it on the COI. 

Also, you may want to mention to the school that if they are getting this wording on other COIs, it is fraudulent—unless the agent can show proof of such language in the insurance policy. Point out that the COI is nothing but information. They need to know that any agent adding such wording to a COI, without showing proof that this language is included in the policy, is guilty of material misrepresentation. 

Response 4: “Normally covered” is not language I’ve ever seen in any insurance policy. Issuing such a COI would be an unfair trade practice in many states. 

Response 5: You are the agent of the carrier, which means you need to talk to the carrier about what wording they will and won't allow. Be smart here—don’t do anything without direction from the carrier.

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