February 1, 2021

Beware Dishonest Certificate of Insurance Sample Forms!

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If you’re responsible for tracking and verifying your third party’s certificates of insurance, then you should be aware of their importance. Legitimate certificates typically reflect valid coverage.

However, in these difficult economic times, some people can’t afford insurance and will forge documents that show they are covered when they’re not. The reason for their dishonesty is irrelevant. What should matter to your company is whether or not they are sufficiently covered. The amount and type of insurance can mitigate your company’s financial risk.

A fake business insurance certificate can cost your company money. Spotting fraudulent forms can be a significant measure that can prevent your company from sinking under the weight of liability. The three basic things you can do are:

  • Check all of your third parties’ certificates of insurance.
  • Know how to spot invalid certificates.
  • Know what can happen if you don’t validate them.

Check Your Certificate of Insurance PDFs

What is a certificate of insurance for vendors and other third parties?

This document is proof that the contracted third parties your company hires are insured. Uninsured third parties can increase your company’s liabilities. Their negligence and lack of coverage can destroy your company if they injure themselves or anyone else on the job.

There’s no remarkable difference between a certificate of insurance for small business and one for larger enterprises. Insurance is crucial for any company.

Having a certificate of liability insurance sample or two on hand can help you determine what information you need to confirm. When you check a certificate of liability insurance form for accuracy, you’re doing a great service to your company’s future.

What is the Standard ACORD 25 Form?

ACORD, the Association for Cooperative Operations Research and Development, issues and archives standardized insurance forms. Since the forms adhere to industry guidelines, many companies accept them as proof of insurance coverage.

If you’re searching for an ACORD certificate of insurance sample, keep in mind that there are several types. You should choose the one that is most relevant to your situation. For instance, an ACORD 25 form concerns liability insurance coverage while an ACORD 24 concerns property insurance coverages.

You can search for any type of certificate of insurance online. Obtaining one from ACORD’s website helps ensure you’re getting the best material from a known and trusted origin.

How to Spot a Fake Business Insurance Certificate

If you know how to get a certificate of liability insurance, then you already know how to request a certificate of insurance from a vendor. Most agents or brokers prepare and provide these to their customers so a certificate of insurance for business cost should be free. They should also be readily available if you need them.

If you request one from a third party and it takes an unusually long time to receive it, then you should double-check it for authenticity. There are some tell-tale signs of a fake certificate:

  • It’s handwritten: Anyone can create a form with a pen and piece of paper. Having an official-looking document that appears typed and printed lends credibility to its contents.
  • It’s poorly photocopied: If you can’t read a certificate because it’s too dark or looks like a faded fifth-generation copy, then it may contain incorrect or deceptive information. Anyone can use an old form, add a few details here and there, and photocopy it to make it appear as if it came from a credible source.
  • It’s missing details: People can download a blank certificate of insurance PDF and fill in any information they want. If they’re in a hurry or looking to dupe authorities, they might leave out items like the coverage type or the carrier’s address. Anything is possible.

What If You Don’t Verify Your COIs?

A certificate of insurance for business is a critical element that should be seriously handled. Verifying certificates of insurance can help you get better at spotting false ones. If you don’t spend an adequate amount of time managing them, you can increase your company’s risk and create longer cycles of approvals – both of which can be detrimental.

A notable example of what can happen if you disregard the dangers of counterfeit certificates involves the city of Hartford, Connecticut losing $700,000 they could have recovered if the firm they employed was properly insured. The firm allegedly issued a false certificate to the city. Hartford officials took this to mean that the firm was covered and business would continue as usual.

Accepting a certificate of insurance and assuming coverage is in place can be a costly lesson. Checking certificates requires time and expertise. If you’re not sure how to detect dishonest forms, a certificate of liability insurance sample can be beneficial. Tracking certificates with a company like myCOI can also help your company maintain insurance compliance and legitimacy.

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