ACORD 25 Instructions

ACORD 25 (2001/08) - Certificate of Liability Insurance

The Certificate of Insurance ACORD 25 is "issued as a matter of information only, and confers no rights upon the certificate holder. This certificate does not amend, extend, or alter the coverage afforded by policies".

The above information is included in the opening statement of the form.

If the receiver of the form wants to verify that liability coverage exists on a policy and has no direct interest in the policy, use the certificate of insurance. However, if the receiver of the form does have a verifiable interest in the policy, such as an additional insured, the liability policy must be amended by endorsement, to provide the appropriate coverage for the interested party prior to issuing a certificate of insurance (since the certificate confers no rights upon the holder and does not amend the policy).

ACORD 25 was designed to collect policy limit information based on the ISO commercial lines program . It addresses both Claims Made and Occurrence policies.

Purpose of the Certificate of Liability Insurance

The purpose of the Certificate of Liability has been the topic of frequent discussions throughout the industry. Attention centers around the true purpose of a certificate and the rights, if any, it conveys to a certificate holder.

In 1974, the Court of Appeals, Fifth District ruled that a certificate is not a contract between the holder and the insurer. It only provides information to an interested third party that insurance is in force at the time of issuance. The court also stated: "The provision regarding notification in the event of cancellation is a mere promise, unsupported by any consideration." Although many companies provide notice of cancellation to certificate holders, they are not obliged to do so, since the holder is not a party to the contract. Agents or brokers should not change any provision on this form without prior consent of the issuing company.

The Certificate of Liability Insurance is used for most casualty situations in which the insured has requested certification to a third party of issued casualty coverages.. The uses of the Certificate can include large and small contracting or manufacturing risks, lessor/lessee agreements, or other areas of liability certification.

The ACORD Certificate should be issued only in compliance with company instructions. ACORD recommends that the Certificate NOT be used in the following situations:

To waive rights
To provide information to the owner of a leased motor vehicle or the lender about both liability and physical damage coverages applying to the vehicle (ACORD 23, Leased Auto Certificate of Insurance, should be used for this)
To quote wording from a contract
To attach to an endorsement
To quote any wording which amends a policy unless the policy itself has been amended

IMPORTANT

Kentucky, Minnesota, North Carolina and Wisconsin require the filing of certificate of insurance forms. ACORD has filed all of its certificates in these states.

In these states, the text of ACORD's certificates cannot be modified, unless the modified form is filed for approval by the respective state Department of Insurance.

Additionally, virtually every other state will not allow any change in a certificate of insurance that would attempt to modify a policy unless the revised certificate is filed and approved.

IDENTIFICATION SECTION

Date
Month/day/year which the form is completed.

INSURERS AFFORDING COVERAGE

Insurer Letter A through E
This section is designed for use in certifying coverage issued by many as five companies. Enter only full legal company name(s) as found in the file copy of the policy. Do not enter group or trade names.

NAIC No.
Enter the NAIC number for each insurer affording coverage.

COVERAGES

Insr Ltr
Enter the Insurer Letter, as identified in the Insurers Affording Coverage section, next to the appropriate coverage(s).

Add'l Insrd
Use this column if the certificate holder has been named as an additional insured for any of the coverages described in the certificate. Place a check mark next to each coverage where an additional insured endorsement has been issued.

Policy Number
Show the number exactly as it appears on the policy, including prefix and suffix symbols for each "Type of Insurance".

Policy Effective Date
Date on which the terms of the policy commenced.

Policy Expiration Date
Date on which the terms and conditions of the policy expire.

Limits
All limits should be listed as whole dollar amounts. Enter limits corresponding to those found on the policy declarations page. Any questions about appropriate limits or applicable policy coverage(s) should be answered by the issuing insurer(s).

Abbreviations:

Med. Exp. . . . . . . . . . . . . . . . Medical Expense
Personal & Adv. Injury . . . . . . . Personal and Advertising Injury
Products-Comp/Op Agg . . . . . . Products and Completed Operations Aggregate

General Liability
Complete this section if you are certifying general liability coverage.

Commercial General Liability
Check this box for Commercial General Liability (CGL) and one of the corresponding boxes to designate the type of policy issued, Claims Made, or Occurrence (Occur).

Other General Liability Coverages
The two open option boxes available allow listing of liability coverages not found on this form. List the coverage type next to the available box. An example of this would be issuing a certificate for Comprehensive Personal Liability. The first box would be checked and "Comprehensive Personal Liability" would be inserted on the line after the box.

General Aggregate Limit Applies Per
Check the appropriate box to indicate if the general aggregate limit applies per policy, per project, or per location.

Automobile Liability
Complete this section only if you are certifying automobile liability. Check all appropriate boxes to correspond with the covered auto symbols found on the policy declarations page.

The last available option box allows listing an automobile liability coverage not found on this form. List the coverage type next to this optional box.

If the certificate is being issued to the owner of a leased vehicle, DO NOT USE THIS FORM. Use ACORD 23, Leased Auto Certificate of Insurance.

Garage Liability
Complete this section only if you are certifying garage liability. Use the available lines or the "Any Auto" option to indicate coverage specifics.

Excess/Umbrella Liability
Complete this section only if you are certifying some type of excess or umbrella liability policy. Check the appropriate box to indicate whether the "coverage trigger" is on a claims-made or an occurrence basis. Also show any deductible or retention amount.

Workers Compensation and Employers' Liability
If workers compensation coverage is based on statutory limits, check the appropriate box within the limit section. If other limits apply (allowed in only a few states) , check the appropriate box and show the limits in the "Other" section.

If Employer's Liability is to be certified, show the limits applicable to "Each Accident", "Disease-Each Employee" and "Disease-Policy Limit".

Other
This section certifies other coverages that are not listed on the form. The type of insurance, policy number, policy effective date, policy expiration date and limits sections should be completed.

Description of Operations/Locations/Vehicles/Exclusions Added by Endorsement/Special Provisions
Record information necessary to identify the operations, locations or vehicles for which the certificate was issued. Any exclusion endorsement or special policy conditions should also be indicated.

Information about additional insureds should also be shown here. However, if it is necessary to show several additional insureds for liability coverages (e.g., mortgagees, vendors, landlords, etc.), and there is not enough room on the form, use the Descriptions box to indicate "see Additional Interest form, ACORD 45, attached" and use ACORD 45 to show the information pertinent to the additional insureds.

Certificate Holder
Name and mailing address of the individual or entity for whom the certificate is being prepared. The line within this field is a margin setting for window envelopes.

Cancellation
Number of days in which the company will endeavor to mail a written cancellation notice. This amount is subject to approval by the company(ies).

Authorized Representative
Form must be signed by an agent, broker, or other representative authorized by all companies to issue Certificates.