How to Review an Acord 25 Form Like a Pro
What is an Acord 25 Form?
The Acord 25 form, also known as a certificate of insurance (COI), is a type of liability insurance certificate that represents the contractual agreements between the insured clients and the insurance agencies. This document shows that the insured is using the specified type of insurance and the amount of insurance required under the insurance policy chosen by the insurance company customer.
An Acord 25 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 listed on the insurance policy.
Why are these Important to Have?
The certificate of insurance form is an important document to all the parties listed as stakeholders, which range from the customers to the insurance company itself. When all insurance carriers and agents use the same forms, there’s a reduced ambiguity and increased accuracy.
These Acord 25 forms (COIs) contain checkboxes and pre-printed areas that clarify significant insurance details – like IRS forms. This form is significant because it’s 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 damage or loss does occur and you’re unable to provide the insured’s COI, it could take weeks for the claims representative and legal counsel to complete the claims adjustment process, costing you thousands in litigation fees.
- If your insurers perform a premium audit and your company doesn’t 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 don’t have the current COI.)
- Most important, not having a process or system in place exposes you to millions of dollars in damage claims filed every year.
How to Read an Acord 25 Insurance Certificate?
Reviewing a certificate can be difficult, but when provided with the right information and skills, it’s manageable. The date of production is 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 has coverage from whom.
The most vital areas listed in the Acord 25 that need review 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 Certificates
Need someone to help 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 remain protected.
Still unsure about how to 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!