How to Complete the ACORD 126 Remarks Section and Read the Fraud Warning

ACORD 126 Remarks Section and Fraud Warning

REMARKS

This is a free form text entry box where you can add any information you wish. I recommend you use it for things you may have put in your cover letter to the underwriter. That letter will likely get lost somewhere, but the application will remain for years.

If you are using the Remarks section to add to a response to a question earlier in this form, start the remark with the section name and question number. That will allow your underwriter to understand what this additional information is meant to answer.

There is a fair amount of space here but is you need more use the ACORD 101.

FRAUD

The very last thing on the ACORD 126 for is a bunch of text about the criminal status of knowingly and with intent providing false information in these documents. It is a crime and a felony in many states.

The purpose of placing this on the form is either to advise you which states it is not a crime in so you can go to that state to complete the forms - I doubt that - or to impress upon you and your insured the importance of being honest, accurate and disclosing information fully.


I hope this has helped you learn how to complete the ACORD 126 Remarks section.

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How to Complete the ACORD 126 General Information Section

ACORD 126 General Information Section

The General Information questions begin on page 3 and continue on page 4 of the ACORD 126 Commercial General Liability Section.

As I am writing this on June 10, 2014 this section has 20 questions. All questions are set up as Yes or No answers first. Then, if you have any Yes answers you need to provide an explanation.

The explanation should begin in the free form text entry space in the box with the Question.

If you need more room use the Remarks section on page 4. Remember to begin your additional information in the Remarks section with the question number.

Beware of making the mistake of thinking you should answer all questions with a "No". For instance, the current question #19 asks whether there is a formal, written safety and security policy in effect. Answering this "No" will make this risk less attractive to your underwriter.

Take the time to read each question completely. I even read things like this out loud sometimes. It stops me from letting boredom allow my eyes to fog over and skip some things. If I am really having a hard time focusing I will read a few sentences backwards. That always helps me refocus. Plus sometimes it can make the sentence sound like Yoda is asking a question.

I hope this helps you learn how to complete the ACORD 126 General Information Section.

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How to Complete the ACORD 126 Additional Interest and Certificate Recipient Section

ACORD 126 Additional Interest and Certificate Recipient

If you have more than one Additional Interest or Certificate Recipient use the ACORD 45 form to list the others and attach that form to your application.

Not all fields apply to all insureds. Only complete the ones which do apply. This is very important as any Additional Interest is given many of the rights of the Insured. You do not want to give these rights by error.

INTEREST

Check the box which applies for this specific business entity.

ADDITIONAL INSURED - Good Definition HERE

EMPLOYEE AS LESSOR - If one of this business' employees is leasing property to this business

LIENHOLDER - a person who retains legal possession of a piece of property until the person to whom he/she has advanced money for use of the property has satisfactorily repaid the debt.

LOSS PAYEE - Good Definition HERE

MORTGAGEE - Good Discussion HERE

OTHER - List your own here

NAME ADDRESS

Enter the full name and address as they need to be shown on a certificate of insurance.

RANK

Additional Interest can have a priority of rights. A rank of 1 would indicate this Additional Interest would receive protection from the policy prior to payments being made on behalf of lower ranked Additional Interests.

CHECK BOX - EVIDENCE / CERTIFICATE 

ACORD advises you to put a check in the box if the Additional Interest Requires a Certificate. I suppose you need to add a Remark as to whether that is a Certificate or an Evidence of Insurance form.

Evidence means the Additional Interest requires an ACORD 27 or ACORD 28 Evidence of Insurance form to be issued.

REFERENCE  / LOAN #

Enter the loan number.

INTEREST IN ITEM NUMBER

LOCATION, BUILDING, ITEM, ITEM DESCRIPTION

The number to enter here is the number referencing this at other places in this application. For instance, Location refers to the location number listed in the PREMISES INFORMATION section at the top of this page.

ITEM DESCRIPTION

If there is no other reference number in this form or other forms which are part of this application, enter a description.


I hope this helps you learn how to complete the ACORD 126 Additional Interest and Certificate Recipient Section.

How to Complete the ACORD 126 Products and Completed Operations Section

ACORD 126 Products and Completed Operations Section

The Products / Completed Operations section of the ACORD 126 is the bottom half of the second page.

PRODUCTS / COMPLETED OPERATIONS

The first section asks for a description of individual products. Even small manufacturers probably have more than three products. You will most likely need to use the ACORD 101 form to list more products. Or you could use a spreadsheet and attach it to the application.

There is also wording on the application asking you to include any literature, brochures, labels, warnings, etc.

There are seven columns for each listed product.

1 - PRODUCTS - give a brief description of the product. I would include the product's name.

2 - ANNUAL GROSS SALES - this would be the dollar amount of sales rounded off to a reasonable number.

3 - # OF UNITS - use a numeric entry. Rounding off is acceptable.

4 - TIME IN MARKET - This is from the date this product was first sold to an intended end user. If there have been several generations of this product, and those generations have significant product changes, I suggest you list these generations as separate products.

5 - EXPECTED LIFE - how long does the manufacturer expect this product to continue to be used?

6 - INTENDED USE - a brief description of how the manufacturer thinks people should be using this product.

7 - PRINCIPAL COMPONENTS - in creating this list I am certain the underwriter would like to know if any of the components are made by other manufacturers and simply assembled by your insured. That will lead to your underwriter asking about the insurance carried by that component provider. You might as well anticipate that question and answer it in advance if possible.

The limited space provided on the ACORD for really does argue for you to create a spreadsheet for this information.

GENERAL QUESTIONS ON PRODUCTS / COMPLETED OPERATIONS

There are ten yes or no questions as of this writing (6/6/2014). If the answer to any question is yes you will need to use the space under the question to enter an explanation. If you need more room use the REMARKS section of this form.

1 - DOES APPLICANT INSTALL, SERVICE OR DEMONSTRATE PRODUCTS? It is hard for me to understand how the answer to this question could ever be No.

2 - FOREIGN PRODUCTS SOLD, DISTRIBUTED, USED AS COMPONENTS? (If YES, attach ACORD 815) Foreign products refers to products imported into this country as opposed to products exported to other countries.

3 - RESEARCH AND DEVELOPMENT CONDUCTED OR NEW PRODUCTS PLANNED? If your insured is not doing this then they are probably not going to be in business for the long term.

4 - GUARANTIES, WARRANTIES, HOLD HARMLESS AGREEMENTS? You might as well include copies of any written documents on these. Your underwriter will certainly ask for them.

5 - PRODUCTS RELATED TO AIRCRAFT/SPACE INDUSTRY? That would be pretty cool. Especially if you were insuring things in outer space. Read the policy definition of territory of coverage.

6 - PRODUCTS RECALLED, DISCONTINUED, CHANGED?

7 - PRODUCTS OF OTHERS SOLD OR RE-PACKAGED UNDER APPLICANT LABEL?

8 - PRODUCTS UNDER LABEL OR OTHERS?

9 - VENDORS COVERAGE REQUIRED? Your underwriter will also ask about required certificates of insurance.

10 - DOES ANY NAMED INSURED SELL TO OTHER NAMED INSUREDS?


I hope this helps you learn how to complete the ACORD 126 Products and Completed Operations section.

How to Complete the ACORD 126 Contractors Section

ACORD 126 Contractors Section

1. DOES APPLICANT DRAW PLANS, DESIGNS, OR SPECIFICATIONS FOR OTHERS? (Petty grammatical note - there should not be a comma after the word designs)

This is a yes or no question. If the answer is yes use the space in the question box to explain. If you need more space use the REMARKS section of this form. If you need still more space use the ACORD 101 form.

The paragraph above applies to all explanations in this section. If you need even more space and the underwriter is in a location you have always wanted to visit, get the business to send you there to explain in person. If the underwriter is in a location you never want to visit, invite the underwriter to have his employer send him on a business trip to visit you. Have him meet the insured and take them both to an expensive dinner.

2. DO ANY OPERATIONS INCLUDE BLASTING OR UTILIZE OR STORE EXPLOSIVE MATERIAL? Answer yes or no with an explanation as outlined in #1. (Grammar note: this is the correct use of no comma, although it reads a bit strange.)

3. DO ANY OPERATIONS INCLUDE EXCAVATION, TUNNELING, UNDERGROUND WORK OR EARTH MOVING? Answer yes or no with an explanation as outlined in #1. (Grammar note: this is the correct use of the comma.)

4. DO YOUR SUBCONTRACTORS CARRY COVERAGES OR LIMITS LESS THAN YOURS? Answer yes or no with an explanation as outlined in #1.

5. ARE SUBCONTRACTORS ALLOWED TO WORK WITHOUT PROVIDING YOU WITH A CERTIFICATE OF INSURANCE? Answer yes or no with an explanation as outlined in #1.

6. DOES APPLICANT LEASE EQUIPMENT TO OTHERS WITH OR WITHOUT OPERATORS? Answer yes or no with an explanation as outlined in #1.

At the very bottom of this section are questions about subcontractors.

DESCRIBE THE TYPE OF WORK SUBCONTRACTED.  Use the space below the question to enter free form text. If you need more room use the REMARKS section on page 4 of the ACORD 126.

There are 4 small boxes along the top of the subcontractors box.

$ PAID TO SUBCONTRACTORS Enter a total dollar amount. You can round to the nearest thousand dollars.

% OF WORK SUBCONTRACTED Enter a percentage.

# FULL TIME STAFF Full time staff is normally considered to be staff that works more than a minimum of 30 hours a week. Enter a number.

# PART TIME STAFF Part time staff is normally considered to be staff that works less than a minimum of 30 hours a week. Enter a number.


I hope this has helped you understand how to complete the ACORD 126 contractors section.

ACORD 126 Claims Made and Employee Benefits Section

How to Complete the Claims Made and Employee Benefits Sections of the ACORD 126

CLAIMS MADE SECTION

If you checked the Claims Made box under the Coverages section at the top of this page, you have to answer the questions in this section.

PROPOSED RETROACTIVE DATE: This is the same as the effective date of this policy.

ENTRY DATE INTO UNINTERRUPTED CLAIMS MADE COVERAGE: If this is a new policy, this will be the same as the Proposed Retroactive Date. If this is a renewal policy, this will the the first effective date of the first claims made policy, assuming there have been no lapses of coverage between that date and this policy.

HAS ANY PRODUCT, WORK, ACCIDENT OR LOCATION BEEN EXCLUDED, UNINSURED OR SELF INSURED FROM ANY PREVIOUS COVERAGE? Answer yes or no.

If you answered yes to the above question, enter an explanation either in the space below te question or in the REMARKS section.

WAS TAIL COVERAGE PURCHASED UNDER ANY PREVIOUS POLICY? Answer yes or no.

If the answer is yes, use the space below the question to enter the company name, policy number, effective dates and limits for this coverage.

Once again I lean on IRMI for a good definition...

A provision found within a claims-made policy that permits an insured to report claims that are made against the insured after a policy has expired or been canceled, if the wrongful act that gave rise to the claim took place during the expired/canceled policy.


EMPLOYEE BENEFITS LIABILITY

If your policy will include Employees Benefits Liability coverage you must answer the questions in this section.

DEDUCTIBLE PER CLAIM: Enter the dollar amount of this deductible.

NUMBER OF EMPLOYEES: Enter the total number of employees whether or not they are covered under provided employee benefits.

NUMBER OF EMPLOYEES COVERED BY EMPLOYEE BENEFITS PLANS: Enter the number of employees covered under provided employee benefits. This may be the same or it may be less than the answer to the previous question. It would be strange if it was more.

RETROACTIVE DATE: This will normally be the same as the Retroactive Date listed in the Claims Made section above.


I hope this has helped you learn how to complete the ACORD 126 Claims Made Section and Employee Benefits Liability section.

How to Complete the ACORD 126 Schedule of Hazards

ACORD 126 Schedule of Hazards - including Video

As a special treat, here is a video on this...

How to Find the General Liability Class Code

This is the General Liability code. ISO - Insurance Services Office created these codes for use in rating general liability insurance.

Your carrier will have a list of all these codes. If you use a commercial lines rating software program, that program should have all these codes.

I have found two sources of these codes online at the following links...

https://www.faia.com/core/contentmanager/uploads/FIRL/Rapid%20Reference/Commercial%20General%20Liability%20Classifications%20%E2%80%93%20Numerical%20Listing.pdf

http://www.htbailey.com/tools/class_codes_listing.htm


Neither of these class code look ups is the one shown in the video. That source has been taken offline.

I hope this has been helpful in teaching you how to complete the ACORD 126 schedule of hazards section.