If you’re a business owner who works with contractors or hires others to work for you, you’ve probably requested a certificate of insurance (COI). Or perhaps businesses you’ve worked with have requested to see yours. This document serves as proof that a business or contractor is insured. It outlines the types and amounts of coverage, ensuring that you and others are protected against accidents or mistakes. One of the most widely used and recognized forms of a COI is the ACORD certificate. An ACORD certificate is a standardized document that provides proof of insurance coverage, summarizing key details such as policy types, limits, and effective dates in an easy-to-read format. It’s commonly requested in business transactions to confirm adequate liability and property insurance coverage.
What is an ACORD Certificate?
ACORD certificates are governed by the Association for Cooperative Operations Research and Development. This association is a non-profit organization that provides the standardized forms and certificates for almost 90% of US property and casualty insurance carriers. Before ACORD created standardized forms, insurance companies had their own policy forms, which made it confusing for agents and brokers.
With standardized forms, it’s easier for small business owners to review their insurance and prove to customers and partners that they’re insured. If a document meets the ACORD’s standards, it will have “ACORD” stamped on the top left corner of the document. The insurance agency information will be located just below the stamp.
The ACORD 25 form, also known as a certificate of insurance (COI), is a type of liability insurance certificate that provides evidence of liability insurance, such as general liability insurance or professional liability insurance, and is the most commonly requested certificate of insurance.
Tips Involving ACORD Certificates
When you purchase any type of liability insurance, ask your agent for an ACORD certificate so that you can provide it to any client or business partner that you want to work with. Having this certificate provides proof of your coverage shows businesses or clients that working with you that you have sufficient liability protection.
Common ACORD Certificate Categories
ACORD certificates are categorized by numbers. This gives people a better understanding of the specific forms they might send to prospects or receive from contractors. Some of the most popular forms used in the insurance industry are:
- Certificate of Liability Insurance (25)
- Evidence of Property Insurance (27)
- Certificate of Property Insurance (24)
- Evidence of Commercial Property Insurance (28)
- Additional Remarks (101)
Ask Upfront to See ACORD Certificates
If you are going to work with a contractor or another company, you need to make sure they have their own liability insurance. This will protect your business in the event that they:
- Make a mistake
- Damage a customer’s property, or
- Cause physical harm through their negligence.
The best way to do this is by asking them to send you an ACORD certificate. You should be able to do the same if asked for proof of insurance. When you send an ACORD certificate, it shows that you are responsible, and puts people at ease. With this documentation on hand, individuals and business will be more likely to want to work with you. If your insurance carrier cannot issue ACORD certificates, it might be time to switch to a one who is compliant with your industry standards
Pay Attention to the Details
In addition to confirming proof of an ACORD certificate, it’s vital that you carefully read over the document’s details. ACORD certificates include key insurance information such as expiration dates and coverage limits, which could effect your level of protection. By taking the time to thoroughly examine ACORD certificates, you ensure that your contractor’s policy is up-to-date and provides adequate protection.
It’s also worth mentioning that ACORD certificates are not replacements for an actual insurance policy. While they provide a snapshot of coverage, this documentation doesn’t modify terms of the policy or guarantee coverage. With that said, it’s always wise to request a complete copy of the actually policy. This is especially true if you’re working on a high-risk or high-value project.
Learn More at EZ.Insure
If you want to learn more about ACORD certification, or if you have any other commercial insurance questions, an EZ agent can help! We’ll assess your business’ needs, compare top plans, and find a policy that’s right for you, all in minutes! To get free instant quotes, simply enter your zip code in the bar above, or to speak directly with one of our agents in your area, call (855) 694-0047.
