One of the most daunting—and often reviled—tasks facing agencies today involves the processing of certificates of insurance. This is an activity that typically generates no revenue for the agency but creates significant operational costs and dramatically heightens the agency's E&O exposure.
One consultant estimates the cost to issue a plain-vanilla ACORD 25 document at $7; and if some customization is required, it could be as much as $15-18. This figure could go even higher when responding to requests that insist upon the completion of some sort of “compliance checklist” that consists of dozens of broad, vague, generalized questions about policy coverages.
For example, an agent was given a multipage questionnaire he was required to complete, along with an “affidavit” warranting that coverage was in place and conformed to the construction contract (of which he had read two of 88 pages) that was to be notarized and witnessed by a disinterested third party and sent to the certificate holder via certified mail. This document required that over 400 entries be completed.
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