Why Certificates of Insurance Accept Acord Form 25 .pdf
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Why Certificates of Insurance Accept Acord Form 25
A certificate of insurance is a form that provides information about insurance
policies. This certificate usually puts, in a nutshell, the essential terms, conditions
and the period of the policy at the time that the certificate was issued.
In as much as certificates are not the legal equivalent of actual insurance policies,
they are the conventional means of confirming insurance coverage. The certificates
are easier obtain on the part of the certificate providers than the policies
themselves, and even easier for the certificate holder to go through.
Types of Certificates of Insurance
In most cases, insurance companies or agents will provide certificates according to
standardized forms published by ACORD (Association for Cooperative Operations
Research and Development). The standardized forms provide basic information
about the coverage, such as the types of insurance, limits in effect, and any special
insurance requirements that have been requested (such as the naming of your
company as an Additional Insured). In essence, the primary certificate used for
liability insurance is the ACORD 25.
ACORD Form 25, what is it?
ACORD 25 is the certificate of insurance that is given as a matter of information only
and accords no rights upon the certificate holder. This certificate does not amend,
extend, or change the coverage afforded by the policies.
ACORD 25 was ideally designed to collect policy limit information based on the ISO
commercial lines program. It takes care of both claims made and occurrence
Where a party has Additional Insured status, they can directly access the other
party's insurance policy, i.e., the Named Insured party. In the absence of the
Additional Insured status, the first party would need to submit a claim to their
insurance carrier first. From there, they then attempt to recover damages and legal
fees through a contract’s indemnity clause or subrogation.
However, the Named Insured’s insurance carrier cannot subrogate against
Additional Insured entities.
• A Vendors Endorsement gives a company that is selling (but not modifying) the
products of another company Additional Insured status on the first company’s
Product Liability insurance policy. A Vendors Endorsement may specify “blanket”
coverage of all products and all vendors, or it may be specific to particular ones.
• Additional Insured status is not available on Workers’ Compensation policies.
• An Alternate Employer Endorsement provides primary Workers’ Compensation
and Employer’s Liability coverage to another party, such as customers of a
temporary employment agency
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