Certificates of Insurance

Insurance certificates can create significant liability for insurance agents and brokers, and cause insurance agents errors & omissions (E&O) claims.  A recent and very serious crash in Connecticut has been national news, and a significant part of the approaching litigation will center on the apparent lack of insurance and whether there is any insurance agent liability.

The short story is that an out of control truck came down Avon Mountain near Hartford, ran a stop light and crashed into a number of cars waiting for the light, killing and injuring a number of people.  The insurance on the truck had been cancelled a few months before, and the owner has been charged with attempted insurance fraud.  (Apparently the owner tried to reinstate coverage moments after the accident.)

Insurance certificates are center stage in the just filed litigation.  While the insurance had been cancelled (no question about this), the agent had issued certificates of insurance.  It appears that the certificates do not indicate coverage for the specific vehicle, but have given some hope to the victims’ families that there may be coverage.  (See here and here, and see here and here for summary information on the accident.)

While agents and brokers typically view insurance certificates as evidence, in summary form, that insurance is in place, many may not realize the significance a certificate can have after a loss has occurred.  Significant liability, and insurance agents errors & omissions (E&O) claims, can occur when certificates are not handled correctly.