How to Review an Acord 25 Form Like a Pro
What is an Acord 25 Form?
The Acord 25 form, more commonly known as a certificate of insurance, is a type of liability insurance certificate that represents the contractual agreements between the insured clients and the insurance agencies. This document is used to make sure the insured is using the specified type of insurance and amount of insurance required under the insurance policy chosen by the insurance company customer.
It essentially summarizes information about the insurance policy, such as coverage types, policy numbers, insurance limits, and effective and expiration dates. The Acord 25 form also provides the information of all the parties that are listed on the insurance policy.
Why is an Acord 25 Certificate Important to Have?
The certificate of insurance form is an important document to all of the parties listed as the stakeholders, which range from the customers to the insurance company itself. When all insurance carriers and agents use the same forms, there is a reduced ambiguity and increased accuracy.
These Acord 25 forms (COIs) contain check boxes and pre-printed areas that clarify significant insurance details – kind of like IRS forms. The form is significant because it is a legally binding document between the insurance broker and its clients, making it the “go-to resource” in settling disputes that may arise related to insurance coverage. The certificate of liability provides proof the coverage is effective for a specific date range, making it vital to the companies requesting coverage.
Below are a few consequences of not creating & collecting COIs:
- When a damage or loss does occur and you’re unable to provide the insured’s COI, it could take weeks for the claims rep and legal counsel to complete the claims adjustment process, ultimately costing you thousands in litigation fees.
- If your insurers perform a premium audit and your company does not have proof that your insureds maintain their own insurance, your premium insurance cost goes up. (Not to mention the sudden panic that hits when you realize you do not possess the current COI.)
- Most importantly, not having a process or system in place could potentially expose you to millions of dollars in damage claims filed every year.
How do I review an Acord Form 25?
Reviewing a certificate can be difficult, however when provided with the right information and skills, it can be manageable. The date in which the COI was produced is usually in the top right-hand corner, showing when the COI was completed. The producer and the insured details are also important aspects of the document. This area showcases who is covered by whom.
The most vital areas listed on the Acord 25 and that should be accurately reviewed are the coverage’s reflected. There are three types of coverage’s shown: General Liability, Automobile Liability, and Excess/Umbrella Liability. These outline the types of coverage’s the insured has and the amount of money they are insured for each coverage.
Finally, the cert holder provides information on who is additionally covered by the insurance, which is the “Additional Insured” and shown in the insurance coverage declaration.
How to Manage Acord 25 Forms
Need someone to help efficiently track and manage all those certificates of insurance in your binder or file cabinet? SmartCompliance can help. Our easy-to-use, cloud-based COI management software helps store your Acord 25 forms, track their expiration’s, send automatic renewal requests, transcribe the information and compare to your requirements, so you can remain protected.
Still uncertain on how to accurately or efficiently manage certificates of insurance? Utilize our team of insurance professionals who can take on the entire compliance review process for you. Request a free demo today to get started!