How to Read a Certificate of Insurance
Certificates of Insurance are documents which outline existing insurance coverage for a business. The most commonly used document is the ACORD form, which allows for the information to be filled in as needed. A properly executed form will include: the name of the broker, insured business, insurance companies, and certificate holder; the types and amounts of coverage being offered; the policy number(s); the effective date(s); and any pertinent information regarding endorsements, locations, or type of work being performed. See the example listed in the Resources section.
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Instructions
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ACCORD Form
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Look at the top box on the left of the ACORD form. This is the "Producer" box. Here you will see the name of the broker or brokerage firm which sold the policy and provided the certificate.
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Look at the box underneath this. This is the "Insured" box, where your business name will appear.
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To the right of these boxes you will find the words "Names of Insurers Affording Coverage." The appropriate insurance companies will be listed there, each with a corresponding letter next to it.
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Look at the very bottom of the form and you will find the "Certificate Holder" box. The business which requested the certificate will be listed there. A "Y" or "N" in this area indicates whether this business is an additional insured under the policy.
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Find the column titled "Type of Insurance." You will see several boxes each corresponding to a different type of insurance. The type which the certificate warrants will have the letter of the appropriate insurance company and an "X" marking the coverages which apply.
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Find the next column, marked "Policy Number." You will see a number in each box for which applicable coverage was indicated in the previous column. This is the number of the policy affording coverage.
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The next two columns are the "Policy Effective Date" and "Policy Expiration Date," which indicate the time for which the listed coverage is valid.
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The final column is titled "Limits." Here is listed the maximum settlement amount afforded by the policy for each listed coverage.
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The last section is titled "Description of Operations/Locations/Vehicles/Exclusions/Added By Endorsement/Special Provisions." Any additional or pertinent information not listed elsewhere will be typed here.
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Tips & Warnings
Though the ACORD form is by far the most widely used certificate, there are other forms being used by some companies. Though the layout of your form may be different, the information listed will be the same.
A certificate of insurance is not an insurance contract. It is simply an outline of the information in an existing contract. Many factors, including non-payment of premium, can cause the listed policy to be invalid.
References
Resources
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