Thousands of certificates of insurance (COIs) are issued every day, and most are issued improperly. In fact, your agency may have issued an improper certificate as recently as this morning.
Now, as if the COI problem wasn’t enough, there’s a NEW “gotcha” in town, the memoranda of coverage or memoranda of insurance. Upper tier contractors have or are beginning to discover that at the COI is what the COI is and not much can be done to or with a COI to give them comfort about the coverage in the referenced polices; thus, they have created this new monster to get YOU in trouble. What agents are now being asked to do is complete a separate document regarding what is and is not covered in the certificated insurance policies. Departments of Insurance don’t seem to have acted on these yet – so the agent is being forced (by their own clients) to reduce the policy to a bunch of check boxes. Do you see a problem here? I bet your E&O carrier will.
There are a lot of rules, statutes, and theories swirling around COIs so you have to be sure you’re dotting all the “i”s and crossing all the “t”s. If you’re not, go ahead and call your E&O carrier – they’ll want to be at the ready. And this new abomination you are being asked to complete should truly raise concerns.
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