The New ACORD Certificates of Insurance

The Certificate and Evidence of Insurance forms that ACORD (Association for Cooperative Operations Research and Development) made effective in late 2009/early 2010 have raised alarm among insurance certificate holders and their attorneys. Many real estate attorneys include insurance provisions in the leases they draft, and they should be aware of these changes. Unless insurers issue manuscript endorsements to their policies (which is unlikely), they no longer make any pledge that they will even attempt to notify the certificate holders if the policies are cancelled. The new certificate forms have eliminated the assurance that the insurer would “endeavor to mail __ days written notice to the certificate holder.” They simply state that ” … should any of the above described policies be cancelled before the expiration date thereof, notice will be delivered in accordance with the policy provisions.”

What It Means

What does that mean to certificate holders under standard insurance policies? 1) Liability and auto ' Even if a certificate holder is an additional insured, it will not be notified if the policy is cancelled. Only the First Named Insured will be notified; 2) Workers' compensation ' Certificate holders will not be notified of cancellation, since the policy requires the insurance company to notify only the covered employer; 3) Property ' Mortgagees and loss payees on standard property policies will be notified: 10 days before the insurer cancels for nonpayment, 30 days before it cancels for any other reason and 10 days before it nonrenews the policy (unless modified by state requirements). Other certificate holders, even additional insureds, will not be notified; and 4) All policies ' Certificate holders, even additional insureds, will not be notified if the insured itself cancels the policy.

Changes in Contracts