Certificates of Insurance
May 24, 2016
Author: Brittney Kleven
Certificates In Trucking
A certificate of insurance is a simple document, yet one that is so important to the trucking industry! They are issued everyday in order to provide proof of insurance to shippers, brokers, banks, truck rental companies, and countless other entities involved in the business of trucking. So what is a certificate of insurance and why is it so important for trucking companies to understand how they work?
What is a certificate?
First and foremost, it’s important to note what a certificate is not. A certificate is not a legal document. A certificate is also not an amendment to the insurance policy. It is simply a piece of paper that provides evidence of basic policy information to an interested customer or 3rd party. A certificate will include information such as coverage type, policy number, effective and expiration dates, and the name of the insurance company affording the coverage. They are also commonly issued upon policy renewal to provide updated information to third parties, the certificate holders.
There are many misconceptions about certificates of insurance. Many believe that limits can easily be altered or added to a certificate. Some third parties also have very specific wording that they believe can be typed on the certificate upon request. However, it’s important to remember again that the certificate is simply a summary of the current policy information. Any adjustments to the limits or the addition of special wording must be endorsed to the policy first, before it can be evidenced on the certificate. This may require getting the insurance company’s approval in order to proceed. Requests such as this may take some time to address and could also result in additional premium. In addition, it’s important to understand what the special wording means and what rights it may be extending to your customers. Let your agent know of any new contracts or customers as soon as possible so they can get to work on any insurance needs for you.
The Agent’s Role in Certificates
Most customers and third parties require certificates to come directly from the insurance agency in order to validate the information being presented. This means that the agent’s role in managing certificates is very important to a trucking company’s business.
- The agency must understand the need to get certificates out to customers quickly so that there are no delays or problems with obtaining loads. Look for an agent that invests in the latest technology in order to do this for you. Certificates should be faxed or emailed to your customers quickly. This is especially important when coverages renew and updated certificates must get sent out to all certificate holders. You should also have the ability to view and print certificates through an online portal.
- The agency must be very diligent about presenting current and accurate information, and stay up to date on the latest laws and requirements on behalf of their clients. You want an agent that cares about handling certificates correctly, as opposed to simply agreeing to terms you don’t have, in order to get certificates out the door.
Working with an agency that specializes in the transportation industry is extremely valuable when it comes to certificates, as they will understand the importance of the above items. A transportation agent may also have experience with the insurance requirements of some of the more common or complicated contracts that are out there, which gives you an added benefit.
COMING SOON – Please watch out for Cottingham & Butler’s LinkedIn profile focused entirely on certificating insurance in the trucking industry.