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Miscellaneous Concepts and Insurance Terminology

Liability & Insurance 750

Insurance Services Offices (ISO)

ISO Basics

  • An association of member insurance companies that publishes standard coverage forms and endorsements.
  • Some insurers use ISO forms exactly as published; some use forms which combine ISO wording with the insurer’s own variation; some create their own wording.

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ISO Endorsement Numbering System

  • The letters indicate the type of coverage: CG = General Liability;
    CA = Commercial Auto; CF = Property
  • The first four digits are the form number
  • The last four digits are the edition date: 04 13 is the April 2013 edition.
  • Example: CG 20 10 04 13
    • CG - a General Liability form or endorsement
    • 20 10 – the form or endorsement number
    • 04 13 – the edition date is April 2013
  • This system is only for ISO forms and doesn’t work for insurers that use their own proprietary forms

Self-Insured Retention (SIR) vs. Liability Deductible

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Certificates of Insurance

  • Standard certificates of insurance convey information about the policy, but do not change it or create coverage.  Although there are exceptions (see below) certificates are not legally binding on insurers.  They usually have the following language:
    • This certificate is issued as a matter of information only and confers no rights upon the certificate holder.  This certificate does not affirmatively or negatively amend, extend, or alter the coverage afforded by the policies below.  This certificate of insurance does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder.
    • IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed.  If SUBROGATION is waived, subject to the terms and conditions of the policy, certain policies may require an endorsement.  A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).
  • Wording on a certificate stating that we are additional insureds or that coverage is primary & non-contributory is not legally binding; these must be endorsed to, or included in, the policy language.
  • If we have an additional insured endorsement without reference to additional insured status on the certificate, we are additional insureds.
  • If the policy does not have an additional insured endorsement, even if the certificate indicates additional insured status, we are not additional insureds.
  • A certificate of insurance is without copies of required endorsement is acceptable when:
    • The insurance company, not the agent or broker, issues it and it does not have the language noted above.
    • The certificate is issued by a public agency risk sharing pool such as CSAC-EIA, California Joint Powers Risk Management Authority, or Public Agency Risk Sharing Association of California.
  • We accept letters of self-insurance from state and federal governments, with or without additional insured wording.  These entities have enough asserts to fund their obligation to indemnify us.

Sample Certificate of Insurance

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