ACORD 25 - Umbrella and Excess Liability Section - How to Complete a Certificate of Insurance Part 7

Here is a quick run through of the Umbrella and Excess Liability sections of the ACORD 25 Certificate of Liability Insurance form.

As always, this is not a courtroom explanation, but a practical guide to help you complete the form.

You should check the box next to either the Umbrella Liability text or the Excess Liability text. While I suppose it is possible to have both an Excess and an Umbrella policy on the same insured, I cannot recall ever seeing this done.

An Umbrella policy provides liability coverage after the underlying, or primary, liability policy has been paid out. Umbrella policies have a significant retention or deductible amount the insured must pay after the primary insurance policy pays. The umbrella policy has its own terms and conditions and may provide coverage the primary policy does not provide or restrict coverage to not cover some losses the primary policy does cover.

An Excess policy can be an Excess Follow policy. This is where the coverage, terms and conditions track the primary policy.

Enter a check mark in either the Deductible or Retention box.

Deductibles and Retention - self insured retention - are not the same. They differ in the responsibilities of the carrier when a loss occurs, defense costs, collateral requirements, limits erosion and certificates of insurance details.

Generally speaking I have been told the deductible is more favorable to the insured. My Daddy always told me for a variety of reasons that it is always best in the event of a loss to have all your policies with the same carrier.

Show the liability limits of coverage - for example $1,000,000.  or $5,000,000, etc next to the appropriate "Each Occurrence" and "Aggregate" text.

If your insured has a deductible you do not have to show the deductible limit on the certificate of insurance, but if they have a self insured retention you do need to show that amount in the box under the other limits.

I hope this is helpful. We all learned everything for a first time as some point. Some of us continue to learn.

Next up is the Workers Compensation Section of the ACORD 25 Certificate of Liability Insurance.

ACORD 25 Auto Liability Limits - How to complete an ACORD 25 -Part 6

Here is a quick explanation of the Limits data fields for Commercial Auto Liability section in the ACORD 25 Certificate of Liability Insurance form.

As always, this is not a court room definition, but intended to help you learn what information goes where on the ACORD form.

Auto policy liability limits are either Combined Single Limits or Split Limits.

The split limits refers to the Bodily Injury and Property Damage having separate, specific limits. So, you will never put limits in the Combined Single Limits field and also put limits in any of the other fields for Automobile Liability.

Combined Single Limits is often abbreviated as CSL.

Bodily Injury and Property Damage are often abbreviated as BI and PD respectively.

Bodily Injury will have a person limit, such as $100,000 and an aggregate limit, such as $300,000. These combinations differ from state to state.

Bodily Injury pays for bodily harm the insured is legally responsible for to others as a result of the operation of a motor vehicle covered under this specific policy. The per person limit is the most the insurance carrier will pay for any one person. The Aggregate limit is the most the insurance carrier will pay regardless of how many people are injured.

Property Damage coverage pays for the damage to the property of others the insured is legally responsible for as a result of the operation of a vehicle insured under this specific policy. The coverage is shown as applying on a per accident basis. The definition of an accident is not the same as an occurrence. It is possible for a given occurrence to consist of many separate accidents. I will get into that in a later post.

I hope this is helpful to you.

Please share with anyone you wish.

We all learn things for the first time at some point.  Tomorrow I will cover the Umbrella and Excess sections of the ACORD 25.

ACORD 25 Auto Liability Fields - How to Complete the ACORD 25 Part 5

Continuing to work our way through the information and data in the ACORD 25 Certificate of Liability Insurance form, here is a quick explanation of the Commercial Automobile Liability Coverage.

The explanations I give are intended to help you complete the Certificate of Insurance. They are not court room definitions and do not replace the wording in any policy.

You should put an X or a check mark in the boxes that apply to coverage provided in the policy for which the certificate of insurance is issued.

Any Auto - this includes coverage for owned, non-owned and hired auto. Provides automatic coverage for autos the insured newly acquires. Not to be used for No-Fault, Medical Payments, Uninsured or Under-insured or Physical Damage coverage.

All Owned Autos - applies only to autos owned by the insured., and for liability coverage on any non-owned trailers while attached to powered units the insured owns.

Hired Autos - covers liability for the use of hired automobiles in your business.

Scheduled Autos  - covers liability for vehicles specifically listed on this policy's schedule.

Non-Owned Autos - applies only to autos which are not owned, leased or hired by the insured which are used in connection with the insured business.

Often, if your insured owns no vehicles in the business name, it is wise to provide a policy for Hired and Non-Owned liability coverage for the business.

The last line contains room to add any two other coverage which may be provided. Examples would be uninsured or under-insured motorists coverage or medical payments.

I hope this is helpful. Tomorrow I will discuss limits for commercial automobile liability section of the ACORD 25 Certificate of Liability form.

Details in the ACORD 25 Certificate of Insurance

Continuing to work our way through the information and data in the ACORD 25 Certificate of Liability Insurance form, here is a quick explanation of the Commercial General Liability Coverage Limits.

The explanations I give are intended to help you complete the Certificate of Insurance. They are not court room definitions and do not replace the wording in any policy. Most general liability policies do not include all these coverages and so the fields would be left blank on the certificate.

Each Occurrence - This is the basic Coverage A limit for Bodily Injury and Property Damage. Regardless of whether the policy is Claims Made or Per Occurrence, this is the limit.

Damage to Rented Premises (each occurrence) -  It covers the insured's liability to others if you occupy leased or rented property for which you could be held legally liable for damage to the property due to fire or explosion. This used to be called Fire Legal Liability.

Medical Expenses (any one person) - this pays, regardless of fault, other persons medical or funeral expenses as outlined in the policy coverage form.

Personal and Advertising Injury - Also referred to as Coverage B. It covers intentional torts such as libel, slander and false arrest.

General Aggregate - This is the maximum amount which will be paid during a given policy period.

Products - Completed Operations - Products coverage pays for covered bodily injury or property damage resulting from a manufacture'rs or distributor's product. Completed operations pays for bodily injury or property damage resulting from work done by a contractor or similar provider.

The final Limits coverage space is blank. You can use it for any other coverage provided under the referenced Commercial General Liability Policy contract.

Hope this is helpful. Next post will review the Automobile Liability section of the ACORD 25 Certificate of Liability form.

The Useful ACORD 101 Additional Remarks Schedule

The ACORD 101 form can be used with any other ACORD form when you need extra space.

We most often see the users of Cap Dat ACORD use it with the ACORD 25 Certificate of Insurance.

Many agents who insure trucking firms use it to list vehicles.

Others use it to be specific about the various job sites the certificate addresses.

The second most common form we see it combined with is the ACORD 125 Commercial Insurance Application - Applicant Information Section. In this combination it is used to expand on the Business Description or the Loss History section.

The ACORD 101 is used so often by our Certificate Center users that we have created a standard template combining the ACORD 25 and the ACORD 101 into a single form to make it a little less work for our users.

Claims Made vs Occurrence Definitions

Experts often suggest that it is extremely important, when purchasing a property and casualty insurance policy, to determine if claims are paid on a "claims made basis" or a "claims occurrence basis".

Occurrence Basis Liability Coverage

If a claim arises out of an event during the period when a policy is in force, the insurance company is responsible for its payments, up to the limits of the policy regardless of when the business submits the claim.

Claims Made Basis Liability Coverage

If a claim is made during the time period a liability policy is in effect, an insurance company is responsible for its payment, up to the limits of the policy, regardless of when the event causing the claim occurred.

Wording from Coverage Explanations in Cap Dat ACORD Forms

We all have to learn these things for the first time. I hope this is helpful.

Here is a Brain Teaser

If a manufacturing company had an occurrence policy in effect when a product was manufactured by that company and a claims made policy in effect when the claim was made, does coverage exist under both policies?

What is the NAIC Code

The ACORD 25 Certificate of Insurance has a section for listing the Insurers Affording  Coverage which asks for the Insurer's Name and NAIC code.

At Cap Dat ACORD Forms we are often asked what the NAIC code is.

NAIC stands for the National Association of Insurance Commissioners.

Here is their website home page...

http://www.naic.org/index.htm

They assign each insurance company a five digit code. You can search for any insurance company by name on their website at this page...

https://eapps.naic.org/cis/

I put in Travelers as the company name and here were my results...

You can see Travelers has many companies so you need to know the exact masthead name for the company.

I hope this is helpful. We all had to learn these things for a first time at some point.