Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 1 Certificates.

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 1 Certificates and Additional Insureds – Five Key Things You Need to Know 1  The webinar will begin shortly.  There is no audio at this time.  This presentation is being recorded for your viewing pleasure at a future date.  The attendance and proctor forms are available under ‘Materials’ in the Webinar’s Console to the right.  The PowerPoint presentation is also available under ‘Materials’.  You will receive the course number for your state near the end of class.  Use the ‘chat’ window for questions on the content.  100% Participation in Polling Questions is required to receive credit for this class. Even if you do not intend to receive credit, please participate in the polls.

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 2 Welcome to your Insurance Community University All of you are currently on mute  Un-mute your own system  Telephone Option  Select Telephone on your screen  Dial in the PIN number so that your number becomes active  Microphone and/or Speaker Option  You can use this option if you have a headset that you use with your computer Audio 2

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 3 Participation & Chat Window You will receive information from the monitor via the ‘Chat’ window.  Please locate window in the control panel Q & A is welcomed during the presentation and at the end of the presentation You will find the question box on your control panel  Write your question in that box and send it to the presenter/organizer The presenter will take those questions in the order submitted 3

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 4 DOI Requirements When you see a slide with the hand up symbol, touch the “hand” icon on your control panel  Click ONCE only If you do not raise your hand, the monitor will be in contact with you in the chat box If you are in a group, the designated proctor is responsible to make certain you are all in attendance at all times 4 = Hand is down

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 5 Forms To Complete for CE After class ends  Return attendance form  Proctors – return your form to email address Email address is in chat window or in email sent to you today 5

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 6 DOI Requirements We will file your hours with the DOI after the completion of this webinar and we have received the attendance form. You have 48 hours to return the form You will be sent a Certificate of Attendance/Completion by email. Please retain this for your records for five years. 6

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 7 Internet Disruption If the presenter looses internet connection STAY ON THE LINE The administrators will communicate with you

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 8 Internet Failure If the internet fails and all participants are kicked off line by Go To Training or other source then the seminar will be terminated You will receive instructions by email as to how we will proceed This is a precautionary notice, only 8

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 9 This class is being recorded Available in the University  Recorded webinar is not for CE credit Archive classes do NOT qualify for CE credit

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 10 Disclaimer Insurance forms and endorsements vary based on insurance company; changes in edition dates; regulations; court decisions; and state jurisdiction. This instructional materials provided by Insight is intended as a general guideline and any interpretations provided by the instructor or the creator(s) of this material do not modify or revise insurance policy language. In providing these materials, the authors assume neither liability nor responsibility to any person or business with respect to any loss that is alleged to be caused directly or indirectly as a result of the instructional materials provided. Copyright 2010 – 2014 All Rights Reserved www.insurancecommunitycenter.com 10

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 11 What this class will cover 1.Course overview on available forms and their applicability 2.Completing documents correctly 3.Common requirements found in business contracts 4.Additional Insureds added to liability policies 5.Common AI endorsements

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 12 Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 12 Your Instructor Today Casey Roberts, CIC, AFIS, ACSR President, Laurus Insurance Consulting

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 13 Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 13 Certificates Of Liability Insurance (COI) 13

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 14 Certificates of Insurance A document issued by or on behalf of an insurance company to a third party who has not contracted with the insurer to purchase an insurance policy Crucial to the insured’s business operations

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 15 ACORD Certificate of Insurance This form is used as the insurance industry standard form Accepted by most entities Insurance companies typically do not create their own Certificates Insurance agents cannot create their own Certificates

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 16 Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 16 Polling Question #1 16

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 17 ACORD Forms What COI edition date are you using?  ACORD 25 Edition Date 08-01  ACORD 25 Edition Date 09-09  ACORD 25 Edition Date 05-10 Are you using the newest form?  If not – Why not?  Are you in violation of any laws? 17

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 18 Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 18 Certificate Issuance Concerns

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 19 Who Can Issue Certificates? Represents Insurance Company May issue Certificates Does NOT authorize the agent to change the insurance policy without an endorsement Agents Represents Insured NOT authorized to issue Certificates Authorization in writing from SL Broker or Insurance Company Brokers

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 20 Problems and Potential E & O Exposures For the Agent Information not supported by policy Wrong insurance company listed Broker placed business -No prior written approval Changing cancellation provision Primary, Non- Contributory End. Omitted Wrong AI or LP endorsement referenced 20

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 21 Possible Consequences Denial of coverage by insurer or Cross-complaint from insurer Suit From Certificate Holder Liability for Uncovered Loss to Third Party Risking suit from insurance company Risking your future Denial of Coverage Under E & O policy 21

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 22 What Are Insurance Companies Doing? Will not review certificates MGAs / Wholesalers being more careful about reviewing certificates Some are issuing the COIs Most are providing limited authority to the retailer

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 23 Requesting Party Who has contacted you to request the COI?  The client  The business partner of the client  Immediately contact the client by email and request confirmation

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 24 Relationship Why is the Certificate of Insurance required?  Lease agreement  Real estate  Vehicle  Equipment  Construction agreement  Vendor agreement  Other type of business contract

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 25 Requirements Does the other party have a document that lists the insurance requirements?  Request the document from the client  Do NOT request from the business partner  Why?  We only take direction from our client

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 26 Requirements Request a copy of the document requiring either the Certificate of Insurance Review the insurance requirements  Pay close attention to the words that are used to describe the requirements  The language is often archaic and improper  Advise the client regarding any language that is not in compliance 26

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 28 Liability Requirements Example Broad form commercial general liability insurance against claims for personal injury, bodily injury, death or property damage occurring upon, in or about the Property, such insurance (A) to be on the so- called “occurrence” form with an occurrence limit of not less than One Million and No/100 Dollars ($1,000,000) and an aggregate limit of not less than Two Million and No/100 Dollars ($2,000,000); (B) to continue at not less than the aforesaid limit until required to be changed by Lender by reason of changed economic conditions making such protection inadequate; and (C) to cover at least the following hazards: (1) premises and operations; (2) products and completed operations on an “if any” basis; (3) independent contractors; (4) contractual liability for all insured contracts; and (5) contractual liability covering the indemnities contained in Article 9 of the Security Instrument to the extent the same is available; 28

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 29 Additional Requirements Example With respect to commercial property, general liability, business income, and umbrella liability insurance required under this Section 5.1(a) (including, if applicable, insurance required under Section 5.1(a)(iv) above), insurance for loss resulting from perils and acts of terrorism in amounts and with terms and conditions applicable to commercial property, general liability, business income, and umbrella liability insurance required under this Section 5.1(a). 29

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 30 Additional Requirements Example All Policies of insurance provided for or contemplated by Section 5.1(a) shall be primary coverage and shall name Borrower as a named insured and, in the case of liability policies, except for the Policy referenced in Section 5.1(a)(v) and (viii), Lender and its successors and/or assigns as the additional insured, as its interests may appear, and, in the case of property insurance (including, but not limited to, flood, earthquake, boiler and machinery, and terrorism insurance), shall name Lender and its successors and/or assigns, as their interests may appear, as mortgagee pursuant to a non-contributing mortgagee clause (or its equivalent) in favor of Lender and its successors and/or assigns providing that the loss thereunder shall be payable to Lender and its successors and/or assigns. Borrower shall not procure or permit any of its constituent entities to procure any other insurance coverage which would be on the same level of payment as the Policies or would adversely impact in any way the ability of Borrower or Lender to collect any proceeds under any of the Policies. 30

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 31 Policies Required Commercial General Liability Business Auto Workers’ Compensation Umbrella or Excess Liability Professional Liability Pollution Liability  Does the client have all of the policies required?  If not, immediately notify the client

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 32 Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 32 Managing Expectations

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 33 Policy: Contract Between Insurer and Insured Insured Enters Into Business Contract Agrees to Certain Insurance Requirements The Insurer Did NOT Enter Into That Other Contract Coverage must match or You Must Change or Notify 33

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 34 Business Contract vs. Insurance COI May Not Match Requirements Must Match Insurance Policies Insurance Policies May Not Match Requirements Business Contract Requires InsuranceRequires a Certificate 34

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 35 Match Contract With Coverage Check contracts for appropriate and available insurance requirements

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 36 Educate Your Client About your certificate procedures Discuss common contract obligations  Create a document that shows obligations in one column and coverage matches or deficiencies in the second column Review obligations to receive COIs from others

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 37 Receiving Coverage Confirmation Make sure the Certificate is unaltered Request copy of policy language to support insurance requirements  Policy  Endorsements  Additional Insured Endorsement  Waiver of Subrogation  Primary, Non-Contributory

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 38 Receiving Coverage Confirmation Verify limits of liability insurance are at least equal those required by the contract Verify that any names shown on the endorsements are correct

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 39 Match Contract With Coverage The large companies receiving Certificates are very aware that you and your E & O coverage is the last resort  Coverage not verified  Your problem if coverage is not in place  You will pay their bill in the end Placing information on the Certificate that you know is false COULD allow your insurance to deny coverage

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 40 Renewal Procedures When renewing coverage, request your insured (in writing) to update the Certificate holder and Additional Insured list with the parties they are required by contract to leave on the policy

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 42 Master Templates Procedures Some accounts may only need one version  Match carefully with the issued coverages  Manage requests by exception only – approval by Senior Account Manager or Supervisor Some accounts may need several versions  Put a brief tag description on each one to identify purpose clearly

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 43 Common Issues Notice of cancellation Additional insured (AI) Waiver of subrogation Primary, non-contributory Deductibles, SIRs 43

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 44 Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 44 Polling Question #4 and #5 44

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 45 Requests to Use Older Edition of COI When asked to use the old or change the language on the forms, explain that they no authority to revise the documents Explain that certificates are filed forms and using old edition dates may violate state law

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 46 New Editions Single biggest reason for the new COI edition:  Cancellation notice on the COI Why?  Old forms put the agent/broker in the middle of the contract requirements and the coverage  Unethical agents/brokers were changing the cancellation provision without changing the policy  Agents/brokers getting sued by insurance companies, clients and client’s business partners 46

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 47 New Cancellation Language SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 48 Notice of Cancellation Notice of cancellation is a POLICY right, not a voluntary service  The policy determines who gets notice of cancellation for what reason(s), and with how much advance notice NONE of the ISO additional insured endorsements provide for any notice of cancellation to the AI AND restrict notice to the First Named Insured

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 49 Facts Regarding Cancellation Notice The insurance policy cannot be changed with words on a COI The First Named Insured receives notice of cancellation If the AI requires notice, the policy must be endorsed  This is not always possible  There will likely be a premium charge 49

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 50 Policy Cancellation Language A.Cancellation 1.The first Named Insured shown in the Declarations may cancel this policy by mailing or delivering to us advance written notice of cancellation. 2.We may cancel this policy by mailing or delivering to the first Named Insured written notice of cancellation at least:

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 51 Policy Cancellation Language a.10 days before the effective date of cancellation if we cancel for nonpayment of premium; or b.30 days before the effective date of cancellation if we cancel for any other reason.

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 52 Effect of Change Follows policy language Reduces improper issuance by agents Complies with state regulations Business contracts need to be reviewed by both contractual parties  The contract could require that the other contractual party be required to notify in the event of coverage cancellation

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 53 Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 53 Related Issues Type of Coverage and Defense Costs Impairment of Aggregate Limits of Insurance Deductibles / Retentions Primary, Non-contributory wording Waiver of Subrogation Additional Insured Requirements 53

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 54 Related Issues Standard Policies Contract requires “standard” occurrence CGL Insured has modified Must advise insured in writing Defense Costs “Standard” liability policies defense is in addition to limit Policy has defense inside the limit Must advise insured in writing Notification Does NOT belong on the Certificate of Liability Insurance Letter (or email) to insured 54

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 55 Impairment of Aggregate The ACORD Certificate is introduced with the following lead in language: “This is to certify that the policies of insurance listed below have been issued to the insured named above for the policy period indicated. Notwithstanding any requirement, term or condition of any contract or other document with respect to which this certificate may be issued or may pertain, the insurance afforded by the policies described herein is subject to all the terms, exclusions, and conditions of such policies. Limits may have been reduced by paid claims.” 55

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 56 Impairment of Aggregate Claim Submitted Reserved Paid Show original limits on the Certificat e 56

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 58 Limits of Liability If the contract / agreement requires $5,000,000 per occurrence for CGL  The fact that the client may have an Umbrella or Excess Liability policy does NOT automatically conform to this requirement  Require confirmation in writing through the client from the business partner that they will allow the Umbrella / Excess Liability policy to comply 58

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 59 Requested Limits of Liability COI recipient wants evidence of: CGL: $1,000,000 / $2,000,000 BAP: $1,000,000 Umbrella: $5,000,000 Client is carrying those limits with the exception of the Umbrella, which is $25,000,000 What do you show on the COI? 59

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 60 Deductibles / SIRs Does the contract / agreement have any language regarding the use of either Deductibles or Self-Insured Retentions?  Client’s deductible is higher than allowed  Document disallows SIRs or client’s SIR is higher than allowed  Producer / Account Manager discuss with client – document results in writing 60

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 61 Deductibles / SIRs Deductibles True Deductible Named Insured Reimburses No Need to Show Retentions Applies to Damages and Defense Costs Named Insured Pays Show on Certificate 61

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 62 Required Coverages What coverages are required to be shown on the COI (by line of coverage)?  Additional Insured  Waiver of Subrogation  Primary, Non-contributory Does the client have all of the coverages required?  If not, immediately notify the broker 62

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 63 Primary, Non-Contributory Wording This requires an endorsement CGL BAP Umbrella This is NOT a primary policy but can act as primary if underlying is exhausted The wording will be slightly different 63

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 64 Waiver of Subrogation An endorsement is available with both of these policies for express agreement if desired Umbrella may follow underlying – check conditions section Policyholder is allowed to waive subrogation in CGL and BAP Endorsement will be required Payroll specific typically 5% Blanket all payroll 2% Waiver of subrogation is not automatically allowed on Workers’ Compensation policies 64

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 65 Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 65 What are the Various States Doing About Certificates?

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 66 IIABA Portal for State Regulations http://www.independentagent.com/Edu cation/VU/Pages/featured- resources/certificates-public/COI-Laws- Regulations.aspx http://www.independentagent.com/Edu cation/VU/Pages/featured- resources/certificates-public/COI-Laws- Regulations.aspx 66

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 67 Various State Laws Arizona California Idaho Missouri New York Pennsylvania Tennessee Texas Washington

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 68 Arizona A.R.S. §20-443 (A)(1) prohibits a person from misrepresenting the terms of any policy issued, or to be issued, or misrepresenting the benefits to be received. An insurer or insurance producer who issues a certificate of insurance that misrepresents or obscures the terms or conditions of the underlying policy violates A.R.S. §20-443 and this may result in administrative action for suspension or revocation of a producer’s license or an insurer’s certificate or authority, civil penalties and, if applicable, restitution. Further, knowingly issuing such certificates of insurance may be prosecuted as a class 5 felony. A.R.S. §20-443.01.

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 69 California: California Insurance Code 384 (a) A certificate of insurance or verification of insurance provided as evidence of insurance in lieu of an actual copy of the insurance policy shall contain the following statements or words to the effect of: 69

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 70 California: California Insurance Code 384  This certificate or verification of insurance is not an insurance policy and does not amend, extend or alter the coverage afforded by the policies listed herein. 70

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 71 California: California Insurance Code 384  Notwithstanding any requirement, term, or condition of any contract or other document with respect to which this certificate or verification of insurance may be issued or may pertain, the insurance afforded by the policies described herein is subject to all the terms, exclusions and conditions of the policies. (b) This section is not applicable to a surplus line broker certificate as defined in Section 48. 71

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 72 State of Idaho – Department of Insurance Bulletin 08-03 72

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 73 State of Idaho – Department of Insurance Bulletin 08-03

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 74 Missouri RSMo§375.932(3) If the Director determines or believes that an insurer, which includes individual producers, “has engaged, is engaging in, or has taken a substantial step toward engaging in an act, practice, or course of business constituting a violation” of the Unfair Trade Practices Act, the Director may take administrative or civil enforcement action “for relief authorized under” either §374.046 or §374.048, RSMo. Each practice in violation of the Unfair Trade Practices Act is deemed a level two violation under §374.049, RSMo.

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 75 New York: ARTICLE 5 CERTIFICATES OF INSURANCE (B) No person shall alter, modify, request or require the alteration of a certificate of insurance form. 75

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 76 New York: ARTICLE 5 CERTIFICATES OF INSURANCE (C) no person shall request or require that a certificate of insurance form contain additional terms, conditions, or language of any kind not found in the insurance policy to which the certificate makes reference or to an endorsement to such policy. 76

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 77 New York: ARTICLE 5 CERTIFICATES OF INSURANCE (D) no person shall request or require either in addition to or in lieu of a certificate of insurance, an opinion letter, warranty, statement, supplemental certificate or any other document or correspondence that is inconsistent with the prohibitions of this section. 77

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 78 New York: ARTICLE 5 CERTIFICATES OF INSURANCE (E) no person shall request or require that a certificate of insurance contain references to a contract other than the insurance policy, or warrant that the insurance policies referenced in the certificate comply with the requirements of a particular contract. 78

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 79 Pennsylvania 40 P.S. § 477b (2006) Requires that certificates be filed for use

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 80 Pennsylvania DOI Notice No. 2009-02 Where an insurer or insurance producer uses a certificate of insurance or other evidence of coverage that goes beyond or does not accurately summarize the policy, the insurer or producer may be misrepresenting the policy language, terms, conditions or coverage limits as issued by the insurer.

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 81 Pennsylvania DOI Notice No. 2009-02 Similarly, language included in a certificate that amends or extends coverage of the underlying policy or states that coverage is actually in force when it is not constitutes a misrepresentation of the coverage provided by the policy; as such, any insurer or producer issuing such a certificate would be in violation of Pennsylvania insurance statues and regulations. Additionally, when a certificate of insurance is used in such a manner that it attempts to modify the terms and conditions of coverage this may subject the certificate to the filing requirements of 31 Pa. Code Chapter 89b....

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 82 Pennsylvania DOI Notice No. 2009-02 Violations of Pennsylvania statutes and regulations may be subject the person issuing or providing the certificate to administrative penalties including possible license suspension or revocation and civil monetary penalty.

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 83 Tennessee: DOI Bulletin 3-2012 83

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 84 Texas: SB 425 (Chapter 11 Insurance Code) Chapter 1811 (a)A property or casualty insurer or agent may not issue a certificate of insurance or any other type of document purporting to be a certificate of insurance if the certificate or document alters, amends, or extends the coverage or terms and conditions provided by the insurance policy referenced on the certificate or document. 84

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 85 Texas: SB 425 (Chapter 11 Insurance Code) Chapter 1811 (b)A certificate of insurance or any other type of document may not convey a contractual right to a certificate holder. 85

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 86 Texas: SB 425 (Chapter 11 Insurance Code) Chapter 1811 Sec. 1811.053. A person may not alter or modify a certificate of insurance form approved under Section 1811.101 unless the alteration or modification is approved by the department. 1811.203. (a) A person, including an insurer or agent, who willfully violates this chapter is subject to a civil penalty of not more than $1,000 for each violation. 86

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 87 Washington: WAC 284-30-355  (3)(a) If a certificate holder is named within the policy or endorsement and the policy or endorsement requires notice to be provided to the certificate holder, a certificate holder only possesses a right to notice of:  (i) Cancellation;  (ii) Nonrenewal; or  (iii) A material change, or any similar notice concerning the insurance policy. 87

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 88 Washington: WAC 284-30-355  (b) The insurance policy governs the terms and conditions of the notice, including the timing of the notice. (4) No person may knowingly demand or require an insurer, insurance producer, surplus line broker, or policyholder to issue a certificate that contains any false or misleading information or that purports to alter, amend, or extend the coverage provided by the insurance policy. 88

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 89 Washington: WAC 284-30-355 (5) No person may knowingly issue or circulate a certificate that contains any false or misleading information or that purports to alter, amend, or extend the coverage provided by the insurance policy. (6) No person may issue, demand, or require, either in addition to or in lieu of a certificate, a document that contains any false or misleading information or that purports to alter, amend, or extend the coverage provided by the insurance policy. 89

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 90 Washington: WAC 284-30-355 (7)(a) Nothing in this section affects or excuses a person's obligation to obtain an insurance policy for the benefit of a third party that conforms to specific contractual or legal requirements.  (b) Notwithstanding any requirement, term, or condition of any contract, the insurance coverage provided by the referenced policy of insurance is subject to all the terms, exclusions, and conditions of the policy. A certificate of insurance does not confer new or additional rights beyond what the referenced policy of insurance provides. 90

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 92 Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 92 Additional Insureds

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 93 What is an Additional Insured? A person or organization, other than the named insured, who is protected by the terms of the policy as an insured These are in addition to those who have insured status within the standard policy. 93

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 94 What is an Additional Insured? Typically required in a business contract of which the Named Insured is a party These parties have full rights to the policy protection, to the extent of the wording on the additional insured endorsement 94

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 95 What is an Additional Insured? Generally added by endorsement or included by a company specific provision that is triggered by some requirement for this status by a written contract or agreement entered into by a named insured 95

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 96 Additional Insureds Determine Interest Before Adding Endorsement Required and Attach Endorsement Available (Type / Edition) 96

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 97 Additional Insureds Additional Insured Blanket or Specifically Named Primary Automatic follow form? Excess / Umbrella Do NOT automatically add Check the contract requirements 97

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 98 Basic Considerations Regarding Additional Insureds When does the coverage requirement end in the business contract? Additional insured status can provide better response for the additional insured rather than just contractual liability 98

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 99 Basic Considerations Regarding Additional Insureds Blanket Additional Insured Used on accounts where a significant number of Additional Insureds are needed Review the language for applicability When required by contract (or agreement?) To the extent required by contract Can provide broader coverage than the business contract requires 99

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 100 Reasons for Requesting Additional Insured Status Privity to the insurance policy – not just indemnitee status Potential for higher total limits available Potential reduction of insurance cost 100

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 101 Why Would an Insured Want to Add an Additional Insured? Relationship with the named insured such as volunteers or members People or organizations with which the named insured has a business relationship and, typically, a contractual relationship 101

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 102 Problems For Your Client Potential Diminution of policy limits Adverse affect on insured’s experience modification, renewability Unintended coverage provided Named Insured pays retention/deductible on behalf of the AI, in addition to paying on their own behalf Defense conflicts 102

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 103 Problems for the Additional Insured Loss of defense control "Other Insurance" conflicts Increased probability of disputes over coverage Limited coverage under current forms Depending on someone else’s insurance program is dangerous 103

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 104 Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 104 Significant Changes by ISO Affected Many Endorsements 104

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 105 Changes in Additional Insured endorsement wording CGL AI endorsements were revised in 2013 – restrictive language AI is covered as long as the loss occurred caused at least in part by the Named Insured or someone acting under their direction and control Affects the majority of the Additional Insured endorsements 105

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 106 Additional Insured Endorsement Revisions Many of the AI endorsements provide fairly broad coverage for the AI that is now more restrictive Some states have statutes that do not allow the AI to receive coverage on another party’s insurance for their own negligence The new language is “only to the extent provided by law” 106

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 107 Additional Insured Endorsement Revisions The other change states that the limits for the AI are the lesser of The policy The limits required by contract 107

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 108 Additional Insured – Owners, Lessees Or Contractors – Automatic Status For Other Parties When Required In Written Construction Agreement CG 20 38 In a General Contractor / Sub-contractor relationship, the GC requires AI status for themselves They also are required by their contract with the Project Owner to add the Project Owner to all subs policies as an AI This endorsement provides that coverage 108

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 109 Additional Insured – Owners, Lessees Or Contractors – Automatic Status When Required In Construction Agreements With You CG 20 37 Clarification of coverage The endorsement now makes reference to the Products / Completed Operations Liability Coverage Part 109

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 110 Additional Insured – Users Of Golfmobiles CG 20 08 Reduction in coverage The endorsement now provides coverage only for golfmobiles that are designed for the purpose of playing golf and covers the users only while using the golfmobile for the purpose of playing golf 110

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 111 Solutions for Avoiding the E&O Exposure inherent in COI issuance 111

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 112 Additional Insured COI Considerations Language on a Certificate was NEVER binding upon the insurance company The party requesting this coverage MUST have an endorsement to the policy Wording on a Certificate is irrelevant Blanket additional insured wording may be in the policy If specific AI endorsement required check with underwriter 112

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 113 Additional Insureds Additional Insured Verify no language implying on WC Primary Automatic follow form? Form allow changes to primary? Excess / Umbrella Do NOT automatically add Primary / Excess 113

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 114 Agents E & O Exposure 1 in 25 E&O claims involve certificates (higher in some states)  36 percent of these claims involve additional insured status (or lack thereof) Certificates issued on lapsed coverage are more common in larger agencies  CPCU eJournal, Bill Wilson

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 115 E & O Reduction Use care when setting up “master” certificates Use the proper form/edition date Promptly request all necessary endorsements Get carrier approval to use non-ACORD forms 115

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 116 E & O Reduction Make sure you are legally able to issue the COI for all of the carriers Document who requested the certificate and how it was transmitted Be careful when reviewing contracts on behalf of the insured – stick with insurance issues Require carrier issuance of Non-ACORD documents 116

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 117 E & O Reduction Pay attention to details - accuracy is key Audit Certificates quarterly Show retentions as provided on the policy 117

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 118 Attendance Check!! 118

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 119 Summary Verify you are using the most current version of the ACORD COI Advise your customers of the changes Do NOT continue to use the older version of the COI – the only reason you would do so would be to add inappropriate wording and changing the cancellation notice  Could result in spending thousands of dollars in legal fees to pursue litigation or to defend oneself from litigation 119

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 120 Upcoming Classes 2/26 & 27 Ethics, Privacy and Compliance 3/4Annuities 3/6Personal Auto Policy 3/11Winery

Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 1 Certificates.

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Insurance Community Center A Center For Learning, A Community For Sharing www.InsuranceCommunityCenter.com Find us on LinkedIn & Facebook! 1 Certificates.

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