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Certificate of Insurance Templates – The Error that Keeps Giving

January 18, 2023
John Paul Sutrich

It’s well known that certificates are the insurance brokers’ Achilles' Heel.  They’re issued in the tens of millions each year and the biggest advent was when they went from three-part non-carbon copy paper (NCR) in a typewriter to an Agency Management System (AMS) word processor that isn’t designed for the nuances of today’s demanding requests.

To improve efficiency, most insurance brokers create certificate templates. They establish a set of coverages and limits and then create certificates by attaching a certificate holder. The problem with certificate templates, however, is critical.

When a template is wrong once, it's wrong forever.

What's Wrong with Using Certificate Templates?

If you have an error in your template, that error may be repeated each time a certificate is generated. Worse, those errors are often carried over into renewal after renewal. 

An example we’ve seen was when a large publicly traded technology company’s insurance broker issued certificates for Technology Errors & Omissions coverage showing that the limits were “per occurrence” when in fact the policy limit was “per claim.”  

Seeing this over and over, the tech company’s contracts department started drafting contracts stating that their coverage was occurrence-based rather than claims-made. After doing this for years, one of the major clients of the tech firm questioned the validity of occurrence-based Tech E&O coverage.  

Once the broker qualified the coverage (which was their error) and reissued all the certificates, the major client required the tech company to triple the E&O limit to $75M. The good news for the broker was that there were no claims. The bad news, however, was that the broker had to pay the premium for the $50M of coverage. 

Some brokers have addressed this issue by requiring two licensed individuals to review each template before it goes into production. While we’re sure deploying more sets of eyes increases accuracy, is it really a wise use of resources when there are technological solutions that can meet your needs more consistently and efficiently? 

So what’s the takeaway?

There are benefits to using certificate templates to issue certificates. However, depending on them isn’t one of them. Certificate Hero utilizes technology and AMS integration to increase certificate accuracy while preserving the efficiency of using certificate templates, or even issuing certificates in a new, template-independent way. 

Certificate Hero can help you simplify your certificate issuance to save you time and labor while minimizing the risk of errors and omissions. Reach out today to learn more!

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