E-Mailing Certificates of
Insurance—
A
Good Thing or Not?
by Curtis M. Pearsall, CPCU, CPIA
Special Consultant to the Utica National E&O Program
Oftentimes in my travels visiting current and potential customers, I am questioned regarding some internal agency procedures and whether they are appropriate from an E&O perspective. Just last week I was asked two excellent questions:
One of the questions involved whether to send certificates of insurance to the insurance company; the other dealt with the issue of e-mailing certificates of insurance to the clients.
Let’s start with the first question. As you know when a certificate is created, typically one copy of the certificate is sent to the policyholder, one to the insured and one to the insurance company. There is no doubt that the first two steps need to be done but many agencies question whether they should send the insurance company their copy. Why? The majority of insurance companies have gone on record stating that they do not want their copy of the certificates. What should an agent do? It is strongly suggested to send them anyway although you may not want to openly go against the wishes of your carriers on this issue.
Now
to the issue of electronically sending certificates. With
the cost of a stamp at 44 cents, for agencies that have clients that
require a significant number of certificates, the cost can be extensive.
One agency I recently visited indicated that they send over 10,000 certificates—this
means they are spending over $4,000 just sending out certificates.
Needless to say, they were very interested in using
modern technology in this area.
In thinking about this I talked with Virginia Bates, a well-known E&O loss control seminar instructor and a good friend. She mentioned that in her classes, most of the agencies she deals with are e-mailing certificates. In fact, two of the leading agency management systems, Applied and AMS, allow on-line faxing or e-mailing of any system-produced item and both allow a digitized version.
In addition to the cost savings, another positive element is that by e-mailing a certificate to the insured, the certificate holder, or both, a record is created that clearly shows the date and the time of the mailing. It would be advisable to either print off a copy of the mailing or create a file folder within the client folder that shows that the certificate was mailed in case it ever needs to be retrieved.
Initially I thought that a potential area of concern would be the ability of someone pulling up the document and modifying it to reflect coverage that was incorrect. Presuming that the document is a format (PDF for example) that does not allow for modification, this issue becomes a non-issue. Since the agency management systems allow for this, it would be advisable for agencies to use this approach, as opposed to creating certificates outside of a standard agency management system.
Not all agencies send the paper copy in the mail. Many fax the information so sending the certificates electronically results in a cleaner copy with the potential for a significant cost savings.