Filed Under:Agent Broker, Agency Technology

Playing COI

Online blowout puts ACORD 25 language under the microscope

If you take away all the sound and fury, it certainly seems that the wording is simple enough:

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 shown may have been reduced by paid claims.

The first sentence simply refers the reader to the information stated in the blocks above our quoted wording. The second reminds us a COI is not the policy but the messenger. Much like the moon has no light of its own but simply reflects the sun, a COI has absolutely no meaning or importance beyond the policies it is meant to represent. And with a finishing flourish, our disclaimer language makes clear any limits shown on the COI are simply the original limits stated on the policies themselves, and not meant to represent any balances currently available in the aggregate checking accounts.

Let us pause and consider what was just stated. The wording is simple and clear,  stating if there are questions, you are looking at the wrong piece of paper for answers. “Don’t shoot me, I’m just the messenger” has been a common plaint throughout the ages from those of us who have been in the same position as the COI, and yet attacked by those who dislike the message. Railing at a COI is akin to ripping the phone out of the wall after bad news (okay, that is dated—perhaps smashing your iPhone against the wall after that “break-up” text), setting fire to your report card after that last disastrous exam, or Voldemort ripping Malfoy when he really wanted his wand upside the head of Harry Potter.

Another set of question arose about limits that may be available on other policies, such as excess layers or umbrellas. Again, using our three-step analysis of the disclaimer, if those policies are not listed on the COI, there would seem no need to list their applicable limits. If you do list the policies on the COI, then the limits must be shown in full.

So far, so good. But now is where the various “English teachers” wade in. Comments flowed about insureds wanting their limits kept secret, so only show what was required, not what was actually on the listed policies. It would seem clear the COI language does not give them that option. Yet in response to that suggestion, lawyers and expert witnesses faced off about the risks of discovery of undisclosed coverages on a suit for higher damages than the COI revealed. Agents waded in about possible wording that could be added to the COI in the remarks section or (gasp!) in the policy endorsements reflecting that no matter what the actual policy limits, only those required in the contract between the insured and the certificate holder would apply. 

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