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How to Get a Certificate of Liability Insurance

  • Where to go for a Certificate of Insurance

  • Benefits of ACORD form

  • What Should the Certificate Include

  • Certificates of Insurance Monitoring Service (Real-Life Benefits)

Those who have been reading our previous articles will be fully aware by now that the best practice for managing risk and avoiding negligent hiring of a trucking company’s services is to require a copy of their Certificate of Insurance showing, at a bare minimum, their cargo and auto liability policies. Those who have not ought to find this information highly intuitive — it should make sense that the best way to manage risk is to be aware of what risks one may be held liable for.

This article is not intended to waste time belaboring the point about why a certificate of liability insurance is the best practice, this is intended to be a discussion of how one acquires the certificate in the first place.

Where to go for a Certificate of Insurance?

In general, the Certificate of Insurance and any additional certificates should be issued by the insurance agent who wrote the coverage, and should provide the contact name, phone and address, policy number, insurance coverage, limits, effective and expiration dates. In every case, it is important to request the Certificate of Insurance from the agent, and not the carrier. You’ll find in the long run that it’s much easier to avoid fraudulent certificates and claims if all information is gathered from the correct sources and kept in order.

As with the insurance certificate, insurance agent background information is notoriously easy to forge. It does not serve a business to be overly trusting when liability, compensation, and even careers are on the line. The best practice in this case is to google the agent’s name, insurance company, phone number, and email so as to ensure that you as the customer have found a valid agency or insurance business to eliminate the potential of fraud.

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Benefits of the Standard ACORD Form

We’ve discussed the ACORD Certificate of Insurance form several times over these articles as a solid example of what a standard, functional certificate of insurance should look like. It is the trucking industry standard provider for the certificate of insurance form, meeting the legal insurance requirements of each state in which one could be doing business. The convenience of having one insurance form that will be accepted in every state cannot be overstated, nor can the importance of having all terms clearly defined for both parties. Sample ACORD forms and other helpful resources for circumspect brokers can be found online on the Association’s site.

What should the Certificate of Insurance include

A successful broker will learn to require the Liability Insurance Certificate to clearly state the primary insurance policies applicable in terms of cargo insurance, auto, bodily injury and property damage (“BIPD”), as well as Worker’s Compensation and General Liability Insurance in order to prevent either the wrong party, or multiple parties, from being held financially accountable for liability they did not take on. A good rule of thumb is to always include a section wherein both the insurance producer (or agent) and the insured are named, and their contact information and phone numbers are listed. It’s also probably a good idea to keep the policy number on file. This isn’t strictly required, but in any commercial relationship the best policy is keeping all of the aggregate information in one place to limit the chances of having to search for a copy of the information later in a crisis claim situation. A potential partner may have any privacy policy they please, but the simple fact of the matter, which you may care to remind them, is that without a statement of responsibility from authorized representatives of both parties against the occurrence of negligence or liability, there’s really no reason not to call the whole thing off.

The Certificate of Insurance should also specify any deductibles, and the situations in which they would apply. Nothing is below notice, no detail is insignificant. For example, expect the deductible associated with a refrigerated unit (reefer) breakdown to be included if transporting refrigerated goods. If the other party’s insurance policy is subject to specific limits, it behooves you and your bottom line to be aware of, and to address these limitations in advance. Included in this section should be the specific policies’ dates issued and expiration or cancellation dates for obvious reasons. A contract that extends beyond the effective period of an insurance policy can potentially expose the other partner to subrogation and further consequences.

The most important thing to remember is that all sections of the Certificate of Liability Insurance must match the exact shared needs of all parties involved in order to ensure smooth operations. Even if it means spending days chasing down a representative from the other party’s agent or insurer, the best practice is secure endorsement from both business partners (carrier and broker), that any questions regarding the carrier’s insurance policies have been addressed in full by the certificate.

Benefits of a Certificate of Insurance Monitoring Service

It may be tempting to think that, now with the certificate in hand, the broker’s job is finished, but due diligence never truly ends. A carrier that has full and comprehensive liability insurance today may not tomorrow–policies lapse or exclusions occur. The broker’s best tool in situations like these is finding a way to constantly monitor and verify carrier insurance, either in-house or through an outside provider. In most cases, an outside provider will be preferable for the simple fact that not requiring employees to constantly monitor business insurance and carrier compliance frees up manpower significantly while allowing experts to lend their expertise on a full-time basis.

In the year 2018, in the age of internet efficiency, options for outside services exist, though the newest and most innovative COI monitoring company in the industry is SaferWatch’s Assure Assist. Whether large or small in size, brokerages looking for new, efficient, scalable means to maintain consistency in their carrier certificate of insurance  compliance process have trouble finding a cost-effective means to do so. Assure Assist provides a unique blend of prioritization that allows them to focus in on the specific carrier a business contracts with at the specific time of the contract. For more information, or for more salient arguments as to why an outside COI Monitoring Company is a good investment, stop by the Assure Assist Website. Companies may choose to keep their certificates insurance monitoring processes in-office, but, as we’re hoping to drive home in these articles, the best policy is awareness and clear information–knowing all of one’s rights and options, and making the best choice.

The watchword through every step of this process is clarity. All parties involved in the transaction must be clear as to what their expectations and responsibilities are, and all limitations, coverages, and liabilities must be made crystal clear at the outset in order to remove the possibility of an ugly surprise later on. As the Certificate of Insurance is often the only one document that shows types of potential responsibilities assumed by the insured (trucking company) and shared with the certificate holder, it is imperative that it be complete and exhaustive. It behooves a business that wishes to stay in business with others to always work towards greater clarity as a means of self-defense.