An ACORD certificate of insurance is a one-page document that summarizes essential information about an organization's insurance coverage. Although some organizations mistakenly believe that a certificate conveys contractual rights to them, ACORD designed it only as a means of providing information to the recipient. It gives information, such as types of coverage, policy numbers, limits of insurance in force, and policy effective and expiration dates. Lenders, property owners, and general contractors often require their borrowers, tenants, and subcontractors to provide certificates.
How To Understand A Certificate
Look for words in large, capitalized font at the top of the form, often beginning with a phrase such as, THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY... These are disclaimers that explain whether the form grants any legal rights to the certificate holder.
Look for boxes labeled PRODUCER and INSURED. Both will contain the names and addresses of people or entities. The producer is the agent or broker from whom the insured purchased the insurance, and is also usually the entity that issues the certificate. The insured is the person or entity whose name is on the described insurance policies.
Look for a list with a heading such as INSURER(S) AFFORDING COVERAGE. Each insurance company on the list will be designated by a letter; for example "INSURER A: Continental Casualty Co." The certificate may also provide the company's identification number assigned by the National Association of Insurance Commissioners (NAIC).
Depending on the type of certificate, one or multiple types of insurance coverage will be listed (PROPERTY, GENERAL LIABILITY, AUTOMOBILE LIABILITY, etc.) For each type, note the following items:
- The letter designating the insurance company providing the coverage (A, B, C, etc.)
- Check boxes describing the insurance. For example, the General Liability section will have check boxes indicating whether the insurer issued the policy on an "occurrence" or "claims made" basis. The Automobile Liability section has boxes to indicate whether coverage applies to all autos, only owned autos, specifically described autos, etc.
- Whether the policy contains an additional insured endorsement or waiver of subrogation endorsement.
- The policy number.
- The effective and expiration dates.
- The limits of insurance.
Look for additional information at the bottom not captured in the coverage details section. Some certificates may include a box for describing the insured's operations, locations, vehicles, project, or other information important to the certificate holder.
Look for a box at the bottom labeled CERTIFICATE HOLDER. It will contain the name and address of the person or entity to whom the producer has issued the certificate. Some certificates may also indicate whether the certificate holder holds a mortgage on insured property or is a lienholder on property or vehicles.
Look for a box labeled AUTHORIZED REPRESENTATIVE. Every certificate has a space at the bottom where the producer or other authorized representative of the listed insurers signs it. Most states require certificates to carry a signature.
- If you find any errors in the certificate, report them immediately. The insured should report them to the producer; the certificate holder should report them to the insured.
- If you are the certificate holder and have specific questions about any of the listed insurance policies, ask the insured for a copy of the policy.