COI Diploma cheat sheet

Risk transfer shifts financial consequence of loss to an insurer in exchange for premium; risk retention keeps it with the insured (deductibles, SIRs, captives).

Insurable interest requires the insured to suffer actual financial loss from the event; it must exist at policy inception and, for property, at time of loss.

Indemnity principle: the insured is restored to pre-loss financial position, not better off; valued policies and replacement cost are defined exceptions.

Utmost good faith imposes duties of disclosure and no misrepresentation on both parties; material misrepresentation can void coverage.

Pure risk (loss or no loss) is insurable; speculative risk (loss or gain) generally is not. Fortuity requires the loss be accidental or unintended from the insured's standpoint.

Law of large numbers lets insurers predict aggregate losses from homogeneous exposure units; it explains pooling but not individual prediction.

Occurrence vs claims-made trigger: occurrence coverage responds to injury/damage during the policy period whenever the claim is made; claims-made responds to claims reported during the period, subject to retroactive date.

Self-insured retention is paid by the insured before the policy responds and is not subject to policy limits or defense obligations unless the policy says so; a deductible is typically subtracted from the insurer's payment.

Standard policy anatomy: declarations, insuring agreement, conditions, exclusions, definitions, and endorsements; the insuring agreement grants coverage, exclusions narrow it, conditions govern duties.

Declarations identify named insured, policy period, limits, deductibles, forms and endorsements, and business description; they control over conflicting general statements in the body.

Insuring agreement establishes the scope of coverage and the trigger; defense obligations in liability forms are usually supplementary to limits for personal and advertising injury but inside limits for some professional forms.

Conditions include notice of loss, cooperation, proof of loss, and suit-against-us provisions; breach can prejudice coverage but generally requires material prejudice in modern liability forms.

Endorsements amend the policy and prevail over the printed form for the specific matter addressed; endorsement numbering and edition dates matter for determining what was actually issued.

Definitions section controls interpretation throughout; terms in quotation marks in exclusions or grants take their defined meaning, not ordinary usage.

Limits: general aggregate, products-completed operations aggregate, each occurrence, personal and advertising injury, damage to premises rented, and medical expense each operate independently.

CGL Coverage A (bodily injury and property damage) requires injury or damage caused by an occurrence during the policy period; Coverage B covers enumerated offenses such as libel, slander, and wrongful eviction.

Coverage C medical payments covers third-party injury on the insured's premises or arising from operations regardless of fault, subject to a per-person limit and a one-year reporting window.

Standard CGL exclusions include expected or intended injury, contractual liability, liquor liability, workers' compensation, employer's liability, pollution, aircraft/auto/watercraft, and damage to your product or work.

The contractual liability exclusion has a carve-out for liability assumed in an insured contract, which includes leases of premises and certain indemnity agreements; this carve-out is central to risk transfer.

Your work and your product exclusions remove coverage for damage to the insured's own completed work or product; the impaired property and recall exceptions preserve some coverage for resulting damage to other property.

Products-completed operations coverage applies to injury or damage occurring away from the insured's premises after the work is completed or the product relinquished; it carries its own aggregate.

Additional insured status is not automatic under the CGL; it requires an endorsement, and the scope of coverage (ongoing operations only, or completed operations too) depends on the endorsement language.

A certificate of insurance is evidence of coverage only; it conveys no rights to the certificate holder and does not amend, extend, or alter the policy.

ACORD 25 is the standard certificate of liability insurance; ACORD 22 covers auto, ACORD 23 property, ACORD 24 certificates of property insurance, and ACORD 101 is an additional remarks page.

The ACORD 25 form contains producer information, insured information, insurers affording coverage, coverages and limits, description of operations, and a signature block.

The disclaimer language stating the certificate is informational and confers no rights is a material term; removing or altering it changes the document's legal character.

The form does not show policy numbers in all versions and does not establish additional insured status, waiver of subrogation, or primary and non-contributory wording by itself.

Limits shown should reflect the actual policy declarations; general aggregate, products-completed operations aggregate, each occurrence, and personal and advertising injury are reported separately.

Certificate forms carry edition dates; the edition date determines the layout and the disclaimer text, and older editions may omit fields such as the subrogation waiver question.

The description of operations box is where additional insured or waiver status is referenced; such references must match an endorsement actually issued or they misrepresent coverage.

Additional insured status is created only by endorsement; the certificate itself does not confer it, even if the description box names the holder as additional insured.

ISO additional insured endorsements differ in scope: CG 20 10 covers liability arising out of the named insured's ongoing operations; CG 20 37 adds completed operations; CG 20 33 covers the AI's own acts in some formulations.

Blanket additional insured endorsements apply automatically to written contracts requiring AI status, but only to the extent the contract requires and only for the described operations.

Primary and non-contributory wording must be endorsed; a certificate notation alone does not make the policy primary over the AI's own coverage.

Waiver of subrogation must be endorsed; contractual waiver language in the underlying agreement does not override a policy condition requiring endorsement.

Indemnity, additional insured status, and insurance procurement are distinct obligations: contractual indemnity is an agreement to hold harmless, AI status provides direct coverage, and procurement requires the other party to buy insurance.

Anti-indemnity statutes in many jurisdictions void indemnity for a party's own negligence, particularly in construction; the insurance and AI provisions may survive even when the indemnity clause does not.

The AI's coverage is limited to the scope of the endorsement; if the endorsement covers only ongoing operations, a completed-operations claim is not covered even if the contract demanded it.

Verification steps: confirm named insured matches the contracting entity, policy period covers the work dates, limits meet contract minimums, and endorsements are actually issued.

A certificate cannot prove endorsement content; request the actual endorsement forms (for example CG 20 10, CG 20 37, waiver of subrogation) or a policy declarations page for verification.

Aggregate limits can be eroded by other claims; a certificate showing a general aggregate does not confirm remaining available limits at the time of loss.

Track expiration dates and require renewal certificates before expiry; a certificate showing a policy period ending before project completion leaves a gap.

Insurer rating and eligibility (AM Best rating, admitted vs surplus lines status) are contract compliance items that certificates may not display.

Notice obligations may run to the additional insured separately; the AI should confirm the claims notice procedure and any requirement to report through the named insured.

Self-insured retention and deductibles can reduce practical recovery; verify whether the SIR applies to the AI and whether the AI must fund it.

Issue certificates only from actual policy records; never create, alter, or backdate a certificate to satisfy a contract requirement.

Do not add additional insured, waiver of subrogation, or primary and non-contributory language to a certificate unless the corresponding endorsement has been issued.

The certificate must not be presented as amending the policy; altering the disclaimer or deleting it misrepresents the document's legal effect.

Errors and omissions exposure arises when a certificate holder relies on inaccurate evidence; document requests and responses in writing.

If coverage cannot be confirmed, disclose the gap to the requesting party rather than issuing a certificate that implies coverage exists.

Producer authority is limited; issuing a certificate does not bind the insurer to provide coverage not in the policy.

Confidentiality applies to insured information; share certificates only with parties entitled to evidence under the contract.

Maintain records of certificates issued, dates, recipients, and the policy basis for any endorsement reference; audit trails support defense of claims.

Certificates are point-in-time documents; a certificate issued at inception does not evidence coverage after the policy expires or is cancelled.

Cancellation notice obligations vary by policy and jurisdiction; the certificate's cancellation box reflects the policy's notice provision, not a guarantee of notice to the holder.

Renewal certificates should reflect the new policy number, period, and limits; carrying forward prior-year limits is a common source of misrepresentation.

When a policy is replaced mid-term, issue a new certificate for the replacement policy and note the change in the description of operations.

Non-renewal or conditional renewal notices are governed by statute in many states and are separate from certificate issuance.

Retain superseded certificates; they may be needed to establish what was represented at a given date.

Reconcile certificate data against declarations pages at each renewal to catch limit or named insured discrepancies.

Read the insurance article for: required coverages, minimum limits, additional insured status, waiver of subrogation, primary and non-contributory, and notice of cancellation.

Match each requirement to an endorsement form; if the contract requires completed operations AI status, CG 20 10 alone is insufficient.

Check whether limits are per occurrence or aggregate and whether the contract requires the aggregate to apply per project.

Identify the entity that must be named: parent, affiliate, lender, or owner may each require separate AI status.

Confirm the policy period covers the full contract term including warranty or maintenance periods.

Note any requirement for a specific insurer rating or admitted status, which the certificate may not evidence.

Document any requirement that cannot be met and obtain a written waiver or acceptance from the counterparty.

Named insured mismatch: certificate shows a trade name or subsidiary not insured under the policy.

Limits shown do not match declarations, often because an older certificate was reused.

Additional insured box checked without an endorsement in force.

Policy period expired or does not cover the project dates.

Waiver of subrogation noted but no endorsement issued.

Insurer listed is not the actual issuing carrier or is a surplus lines carrier not permitted by contract.

Description of operations contains contract language that exceeds the policy's actual coverage.

The additional insured should report claims promptly to the named insured's insurer and to its own insurer to preserve rights.

The AI's own policy may respond first if primary and non-contributory wording is absent.

Cooperation clauses require the insured to assist in defense; the AI may have separate duties.

Tender of defense to the named insured's carrier depends on the AI endorsement's terms and any contractual indemnity.

Document all notices and responses with dates to preserve coverage positions.

Subrogation waivers affect the insurer's recovery rights after payment.

Electronic certificates are valid evidence if issued from the insurer's or producer's system of record.

Version control matters; ensure the current edition date is used.

Access controls should limit who can issue certificates.

Audit logs should capture issuance, modification, and distribution.

Retention periods should meet contractual and regulatory requirements.

Distribution should be limited to entitled parties.

Surplus lines eligibility requirements may be imposed by contract or statute.

Anti-indemnity statutes affect enforceability of indemnity clauses and sometimes AI requirements.

Cancellation and non-renewal notice statutes vary by state.

Producer licensing requirements govern who may issue certificates.

Record retention rules may apply to certificate records.

Contractual venue and choice of law affect which statutes apply.

Confirm requirements in writing before issuance.

Explain coverage limitations clearly to the certificate holder.

Escalate unresolved coverage gaps to management.

Avoid verbal assurances that exceed the policy.

Provide endorsement copies when requested.

Maintain a single point of contact for certificate requests.

Periodic reconciliation of certificates to policies.

Training on endorsement scope differences.

Standard templates with required disclaimers.

Review of contract insurance requirements at intake.

Metrics on certificate turnaround and error rates.

Post-incident review of certificate-related coverage disputes.

Additional insured: party granted coverage by endorsement.

Certificate holder: recipient of evidence of coverage.

Occurrence: accident or continuous exposure causing injury or damage.

Claims-made: coverage triggered by claim reporting during the policy period.

Retroactive date: earliest date to which claims-made coverage applies.

Self-insured retention: amount the insured pays before coverage responds.

Waiver of subrogation: insurer gives up recovery rights against a party.

Primary and non-contributory: the policy pays first without contribution from other insurance.