IIAV Hosts Meeting on Certificates of Insurance

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The Independent Insurance Agents of Virginia’s Technical Committee hosted a meeting on certificates of insurance and discussed agency pitfalls and how agents should respond to requests for certificate amendments – especially if the requests are contrary to policy coverage. Citing demands for certificate amendments as one of the biggest problems agents face today, IIAV invited a wide range of industry and regulatory participants to the meeting.

"That I’m aware of, virtually every state Big "I" is working on this issue either through regulation or a legislative initiative and it’s probably one of the biggest headaches for our member agencies," noted IIAV President & CEO Bob Bradshaw. "Company and public entities can request all sorts of changes to certificates of insurance, but there are legal and regulatory consequences to the changes and we need to figure out how to get the agent out of the middle of these fraudulent requests."

While the new Acord Forms mandated for use this year were designed to resolve some industry complexities, their actual use and differences of opinions concerning the forms have only resulted in greater industry confusion. Moreover, as Virginia is a file and use state regarding use of insurance forms, there is no regulatory oversight on how the forms should be used except that they should accurately reflect policy provisions and, as copyrighted documents, their language cannot be changed.

"The current certificate of insurance practices within our industry creates, on a daily basis, a seemingly limitless number of scary opportunities for our agent members to become entangled in situations that could lead to serious E&O situations, not to mention being at odds with state insurance statutes. Often certificate holders demand that agents make representations of an insurance policy coverage or condition on a certificate that is either just not available or not possible given the circumstances," stated Joe Hudgins, IIAV Vice President – Education & Technical Affairs. "Moreover the consequences of these requests if they are not adhered to, although possibly unintended, are that the insured either does not get a job or does not get paid for a job already completed. On the bright side, I believe that our meeting was a great first step in helping to mitigate these issues and bring some sanity back to the practice of issuing certificates of insurance."

Participants in the meeting agreed to meet again and will review legislative initiatives in other states. IIAV committed to meet with construction, government and locality representatives and come back to the technical committee after receiving their input. IIAV members are also encouraged to send "horror stories" related to certificates to Jhudgins@iiav.com. These will be compiled and used in case a compelling case needs to be made for a legislative initiative.