DOUBLE TROUBLE:
CERTIFICATES OF INSURANCE AND BUSINESS AUTO
ENDORSEMENTS
I.
Unauthorized Entities
II.
Overview
(5 mins)
A. Certificates of Insurance
B. Business Auto Endorsements
III.
IV.
V.
VI.
What Does A Certificate Do?
A.
Developed by ACORD
B.
Basic purpose
C.
Informational snapshot
D.
Recent changes and their importance
(55 mins)
What Certificates Cannot Do
A.
Cannot modify a policy
B.
Cannot comply with other contractual provisions
C.
Cannot be used to substitute for an endorsement
What Do Third Parties Want The Certificate To Do?
A.
Make the COI act as a contract
B.
Provide additional insured status for “everything”
C.
Act as a method to hold agents accountable for “everything”
Three Types Of Certificate Requirements
A.
Wish list
1.
Can create contractual and regulatory problems for agents
2.
Use of older ACORD forms
1
VII.
VIII.
3.
Some states require forms to be filed (ACORD or other)
4.
Requests to amend forms
5.
Should be issued in compliance to company instructions
6.
Requests to complete proprietary forms
7.
Requests to warrant coverages
B.
Fallback position
C.
Deal breakers
Uninsurable Requests
A.
Primary
B.
Non-contributory
C.
Some insurers may have endorsements for this
D.
CG 20 01
Illegal Requests
A.
Nonexistent coverage
B.
Withdrawn additional insured endorsements
C.
Requests to warrant coverage
D.
State laws prohibiting issuance of fraudulent documents
E.
Indemnity agreement agent affidavits
F.
Cancellation dates
G.
What should agencies do?
H.
Use of the latest ACORD 25
2
IX.
Business Auto Coverage Endorsements
A.
B.
C.
D.
(55 mins)
CA 20 48—Designated Insured
1.
“Stealth endorsement”
2.
Used to satisfy AI requests
3.
Mirrors existing policy wording
CA 20 54—Employee Hired Auto
1.
Employees that rent cars
2.
Typically rented in the employee’s name
3.
No coverage for employee under unendorsed BAC
CA 99 10—Drive Other Car—Broadened Coverage for Named
Individual
1.
Extends:
a. Liability
b. Med pay
c. Comp
d. Collision
e. UM
2.
Used for employees that are provided a company vehicle
3.
Employee has no PAP
4.
Extends coverage to named employee and spouse just like a
PAP
5.
Includes coverage for other vehicles insured may operate
6.
Charge based on coverages extended
7.
Be careful!
CA 22 01—Named Individual Broadened Personal Injury Protection
1.
Fills the FL gap created by the DOC
3
E.
F.
G.
H.
CA 99 17—Individual Named Insured
1.
Must have an individual as a named insured
2.
Named insured has no personal autos or PAP
3.
Automatically extends to the named insured’s resident
spouse and family members
4.
Provides coverage just like a PAP
5.
No premium charge
CA 99 33—Employees as Insureds
1.
BAC covers the named insured for employees using their
personal vehicles on company business
2.
Coverage excluded for the employee
3.
CA 99 33 gives coverage back to the employee
CA 99 47—Employee as Lessor
1.
Employee owns a vehicle and leases it back to the business
2.
Business needs to be able to insure the vehicle and
indemnify the employee owner
3.
Allows for notice to the employee/lessor in case of
cancellation
CA 99 34—Social Service Agencies—Volunteers as Insureds
1.
I.
Provides coverage for volunteers that use their personal
vehicles while doing volunteer work for the organization
CA 99 54—Covered Auto Designation Symbol
1.
Adds Symbol 10 to the BAC
2.
Allows company to “manuscript” language to tailor coverage
to the insured’s specific need
4
J.
XI.
CA 20 71—Auto Loan/Lease Gap Coverage
1.
Used for long-term loans or lease situations
2.
Pays the difference between ACV and the loan or lease
payoff
Conclusion
(5 mins)
5