Eagle Eye Contents

Your customer calls you and requests a certificate of insurance.

You take down the information that they want on the certificate as well as a name and fax number (or email address) of the person who is to receive the certificate. You call us and we send the certificate to your customer. It’s a very simple straightforward transaction; what you’ve done is inform your customer of what coverage you have in force on the day the certificate is requested, nothing more or less.

But what happens if your customer wants more than just proof of insurance?

Often they request that you also name them as an additional insured. Giving them Additional Insured status makes your policy respond to claims brought against the additional insured and you, arising out of your negligence, before the additional insured’s coverage responds for them. Generally that is not a problem, as many policies contain language granting Additional Insured status automatically to landlords, loss payees, lessors of property, for example.

However, it is increasingly common these days for your customers to request that more comprehensive provisions be added to certificates. What they really want is for you to alter your insurance contract to add additional provisions that benefit them. These requests MUST be reviewed and approved by the underwriter at your insurance company before the requested language can be added to a certificate. This usually involves providing the underwriter (through us) with the exact language as requested by your customer, along with some detailed information as to the reason for the request. This may include the nature of your work, the product you are to supply or whether your employee(s) will be working at the customer’s site.

The underwriter will review the language in light of the nature of your relationship with the customer, and decide whether or not to grant us permission to use the language on your certificate. Permission may be granted subject to a charge for the additional coverage. He/she may also refuse to allow us to use the language, usually because the requested language represents more risk than the company is willing to take. An example of this would be indemnifying your customer for their sole negligence. In this case, we cannot include the language; if we were to issue it anyway, the insurance carrier would not stand behind the certificate. You and your customer would have to sue us to be reimbursed for any loss suffered.

You may hear from your customer that other vendors (and their agents) are supplying the requested language with no problem. In our experience, our carriers are as willing to consider unusual coverage extensions as any in the industry. What we often discover is that the certificate is issued by an agent who does not contact the carrier, or understand the issues involved. Adding language to the certificate does not change the coverage in your policy unless the underwriter agrees to it. An unwary or unscrupulous agent who just adds the language without permission is putting you at risk of an uncovered loss.

So how should these situations be handled?

• First, you need to give us notice of the requested change as soon as possible. Your personnel who are responsible for bidding and negotiating contracts need to review proposed contract language ahead of time, sending along any unusual requests regarding insurance coverage and indemnification requirements.
• Second, be prepared to give us an opportunity to ask you why the language is needed, based on the nature of the product or service you provide, so we can negotiate successfully on your behalf.
• Third, be ready to qualify your bid if the required language is not available. Unfortunately, we have seen several recent requests that are totally unfair to you and your carrier, and cannot be processed at any price!

Good preparation and communication are the key to issuing accurate certificates of insurance on a timely basis. Please contact us if you would like to know more about this very important issue.