There have been changes recently among the guidelines, standards, and forms produced by the Association for Cooperative Operations Research and Development (ACORD). One of the biggest changes directly affects Certificates of Insurance. Companies and Businesses across the nation heavily rely on their Certificates of Insurances not only as proof of insurance, but as a source that details their specific policy and its effective dates. Up until 2013, a Certificate of Insurance required the insured or certificate holder to be notified when and if their policy is cancelled. This courtesy was detailed as such:
Should any of the above described policies be cancelled before the expiration date thereof, the issuing insurer will endeavor to mail ___ days written notice to the certificate holder named to the left, but failure to do so shall impose no obligation or liability of any kind upon the insurer, its agents or representatives.
Basically, the insurer was expected to mail a written notification to the insured should their policy be cancelled anytime. While most insurance agencies complied with this regulation, they were not held for any liability or obligation to do so. However, with a recent amendment to this standard, new policies now read:
"Should any of the above described policies be cancelled before the expiration date thereof, notice will be delivered in accordance with policy provisions.”
With this new provision, the insurance agency is not even expected to provide notice for cancellation unless they intentionally include the requirement themselves. This means that you could be going about your daily business under the impression that you are insured as specified on your Certificate of Insurance, when the reality is that your policy could have been recently cancelled, and you are none the wiser. Those companies who wish to be current on their insurance coverage have attempted to receive notification of cancellation through a few different means like requesting that their insurance agency provide the “old” certificate that states they will receive notification by mail. However, most insurance agencies are unwilling to provide these older certificates. Companies have also required the counterparty that sells the policy to provide notice of cancellation themselves. Counterparties typically have contracts and policies themselves that can cause complications when it comes to them providing you with cancellation notices.
This is the sort of change that requires you to shop around and be sure to read the fine print in the policies you consider buy. Work with your insurance agent or broker to ensure you won’t be left high and dry when you need it most. At BCS Audit, we can advise and inform you of all you need to look for when applying for insurance. Tracking insurance can be a tedious hassle, but our team is more than qualified to make sure you do not have to worry about such concerns.
Hold harmless language (a/k/a indemnity language) is found in most contracts and agreements, with the purpose of transferring the obligations of one party to another to defend and make whole the other party for legal liability, typically related to the services, work or nature of the contract.