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Expanded Insurance Certificate? Don't Even Ask (NY)

June 28, 2013

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The New York State Senate  and Assembly have  <a href="http://open.nysenate.gov/legislation/bill/S3084A-2013" target="_blank" rel="noopener">passed a bill</a> that will make it illegal for any person to request or require that a certificate of insurance be issued with additional terms that are not contained in the insurance policy.

Currently, insurance producers are prohibited from issuing certificates of insurance that alter, expand or otherwise modify the terms of the actual policy.   However, many times the producer’s clients require certificates that contain these additional terms.  For instance, in the construction context, property owners may require contractors to not only provide certificates of insurance that evidence that the owner has been added as an insured under the contractor’s policy, but that the contractor will also be bound by a“hold harmless” agreement. If the contractor fails to obtain such a certificate it risks losing the job.  In such cases the insurance producer is faced with a no-win situation.  On the one hand, the producer is prohibited from issuing such a certificate under current regulations and, on the other hand, it risks losing a client who will likely find another producer who will issue the certificate.

Therefore, the legislators have passed this bill which prohibits parties such as the owner and contractor, in this example, from requesting that the certificate contain terms not present in the policy.

The next step is for the bill to be delivered to Governor Cuomo to be signed into law.   We will keep you posted on the progress.

Thanks to Mendel Simon for his contribution to this post.  If you would like more information please write to <a href="mailto:mbono@wcmlaw.com">Mike Bono</a>.

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