June 12, 2013

My question involves certificates of insurance. On the certificate, we are telling the certificate holder that he will be notified of any cancellation in accordance with policy provisions. Since our carriers do not want copies of certificates, who is obligated to notify the certificate holder of a cancellation…anybody?

Pennsylvania Subscriber

Since the certificates say the notice of cancellation will be in accordance with policy provisions, and the policy provisions only mention notice going to the first named insured, the insurer is under no obligation to notify the certificate holder. There is no policy requirement that the first named insured notify the certificate holder either. So, unless some endorsement is put on the policy pertaining to the certificate holder, there is no requirement for anyone to notify the holder about cancellation.

Changes to this procedure may certainly be requested, but there is no guarantee of success. In addition, it is difficult to predict how a court would interpret the effect of such a discrepancy between the policy language and the certificate language.

Finally, the individual state laws on cancellation might require such a notice so these should be checked since state law supersedes insurance policy provisions.