Glossary—insurance certificate Glossary—insurance certificate
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(general usage) A term referring to a document which evidences that some type of insurance policy is in effect on behalf of a named assured, specifies the risks covered, and provides information as to the insurance carrier, policy number, dollar limits and other key terms and conditions of coverage. Insurance certificates are a convenient means of communicating to any number of third parties the existence and scope of insurance coverage. They are typically issued by insurance agents and brokers, though an insurance carrier, upon request, will also issue them. For many types of insurance coverage, a standard form (known as an Accord form based on the commercial printer who developed the form), is widely used. Among other features, this form contains a promise by the issuer (broker, agent or carrier, as the case may be) to promptly notify the addressee of the certificate of any changes in coverage; the problem with most such promises is that they contain limiting language (such as "endeavor to notify"), and time periods (such as within 30 days), which effectively lets the issuer "off the hook" for failure to notify, or allows an unacceptable delay in notification. Also, such certificates rarely contain a full disclosure of potentially important policy limitations such as exclusions, deductibles, and co-insurance rates; a full reading of the policy document is needed to learn of these. See also negligent hiring.
| Recommendation: Prudent shippers, freight forwarders and customs brokers should require, as a minimum, general liability and cargo insurance certificates from truckers and service providers whom they hire to carry/handle/store their cargo or that of clients. Additionally, when requesting a certificate of insurance, insist language such as "endeavor" to notify of changes be stricken, and that notification of changes be provided in 10 days, not 30 days. If a broker or agent will not provide such a certificate, demand from the service provider an insurance certificate with a full copy of the policy directly from the insurance underwriter. |
(cargo transportation usage) With respect to cargo, a specific type of insurance certificate issued to evidence insurance coverage of a particular shipment, typically under a marine open cargo policy, an open inland marine policy, or other underlying policy. See marine cargo insurance certificate.