ACORD 25: reading a certificate of liability insurance properly

The ACORD 25 — formally the Certificate of Liability Insurance — is the standard one-page form a broker issues to show that a business carries certain insurance. It is the document a general contractor collects from every subcontractor, a landlord from every tenant, and a client from every vendor, and it is produced in enormous volume precisely because so many contracts require it.

What it is not is a contract. The form says so in its own header: it is issued as a matter of information only, confers no rights on the certificate holder, and does not amend, extend or alter the coverage described. That sentence is the whole subject. A certificate is a snapshot, taken by the broker, of what the policy looked like on the day it was printed — and a policy can be cancelled or amended the day after.

What to read on an ACORD 25

• The named insured. It must match the legal entity you contracted with, not a trading name or an affiliate. Mismatches here are common and fatal to a claim.
• Policy numbers, insurers and each insurer’s rating — separately for general liability, automobile, umbrella and workers compensation.
• Effective and expiration dates for every line, not just the first.
• Limits: each occurrence, general aggregate, products and completed operations, and whether the aggregate applies per project. A shared aggregate already half consumed by someone else’s claim is not the cover you think you bought.
• Whether general liability is written on an occurrence or claims-made basis, which decides whether the cover responds years later.
• The description of operations box, where the additional insured wording, waivers and project references appear.
• The certificate holder — whether it is you, spelled correctly, and at the right address.
• The producer, so you know who to go back to.

The description box is not an endorsement

The most consequential misreading in the whole document is the line in the description of operations reading something like "certificate holder is additional insured". A broker typing that sentence does not create the status. Additional insured status comes from an endorsement on the policy itself — the CG 20 10 and CG 20 37 forms are the ones usually named in construction contracts — and the same is true of a waiver of subrogation and of primary and non-contributory wording. If your contract requires those, ask for the endorsement, not the certificate that mentions it.

The cancellation notice box is another place people relax wrongly. Modern versions of the form say notice will be delivered in accordance with the policy provisions — which may mean notice to the first named insured only, and not to you. If you need to know that a subcontractor’s cover has lapsed, the reliable mechanism is your own expiry tracking, not a promise on a form.

Common defects worth rejecting

Certificates arrive with the wrong entity named, with an expiry date already passed, with limits below the contract requirement, with the workers compensation line blank in a jurisdiction that requires it, with an insurer nobody has heard of, or unsigned. Each of those is a reason to send it back, and sending it back is far cheaper before the work starts than after an incident. Where the stakes justify it, ask for the endorsements and the schedule of forms rather than the certificate alone.

Handling the paperwork

Certificates arrive as PDFs, in email, from brokers who will not send them again quickly. Ettex PDF fills and flattens the forms you issue and keeps the ones you receive as fixed copies, Ettex Records files them per vendor with the endorsements attached, and the expiry dates belong in the process described in certificate of insurance tracking — because a certificate nobody re-collects is a certificate that expires quietly.

Being direct: none of this is insurance advice, and we are not brokers. What a certificate must show, and whether the cover behind it is adequate, are questions for your broker and your contract. What this covers is reading the document carefully and keeping it where it can be found.