Insurance Experts: Questions and Answers on Certificates of Insurance
By Linda Jennings, Bouvier Beckwith & Lennox, Inc. Insurance
Q. What are Certificates of Insurance and what do they mean to your Association?
A. Certificates of insurance, which should be collected from each and every vendor that comes onto an association property, is a representation of who the named insured is, the effective dates, types and limits of coverage as well as the names of the insurance companies that have issued the policies
Additionally, a certificate of insurance will spell out the description of operations, locations, vehicles, exclusions added by endorsement as well as any special provisions.
It is important to note that a certificate of insurance is issued as a matter of information only and confers no rights upon the certificate holder UNLESS the certificate holder specifically requests additional named insured status in which case the certificate holder would be afforded those same rights. Ideally, it is in the Association's best interest to obtain additional named insured status whenever possible to afford it those same protections.
Keep in mind that information contained on a certificate of insurance is a 'snapshot in time' which may or may not be in force at the time of a loss.
Q. Why is it important that Association collect and maintain certificates of insurance?
A. It is important that certificates are collected from each vendor to protect the interest of the Association in the event of a claim. This way, the association knows what coverages are in place and who to contact should anything ever develop.
Additionally, for Associations that carry workers compensation insurance, it is vital that they maintain records of these certificates to avoid being surcharged at audit for exposures that were not covered by the vendors.
Prepared by Linda Jennings, Bouvier Beckwith & Lennox, Inc. Insurance
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