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Certificates of Insurance With Wrong Info Can Ruin Your Business


Certificates of Insurance Are Critical Documents

Certificates of insurance known in the Workers Compensation community as “certs” can wreck your business’s budget and possibly Mod (E-Mod or X-Mod) if not handled properly.   This is a follow-up article to yesterday’s Employee Misclassification conundrum.

We receive calls and emails frequently from employers with this scenario had:

Picture of old Certificates of Insurance paper
by JMWinkworth wikimedia.org

The premium auditor had rejected the certificates of insurance as the certificate of insurance had:

  • Wrong dates of coverage
  • Wrong company name – must be exact
  • Expired cert
  • Coverage no longer applies
  • Unreadable – this occurs more often than one may think
  • Insurance company no longer in existence
  • Not a valid certificate of insurance form
  • Wrong state of coverage
  • Workers Comp coverage not indicated
  • And the list goes on and on…..
Man Climbing Certificates of Insurance Ladder

The Ladder of Insurance(c) will always move non-covered claims up another rung to the first level of Workers Comp insurance available for the claim.  There is a method for verifying a certificate of insurance when your company first receives it.  The dilemma is how do you know if the certificate continues to be valid after the initial receipt or validity check?

The situations where an invalid certificate of insurance seems to occur most often involves the construction or temporary service industries.  The sub-contractor or temporary service agency may not pay their premiums resulting in a policy cancellation.   Their carrier has not the obligation, with a few exceptions, to inform your company of the cancellation.

There are a few methods to make sure that any type of sub-contractor policy cancellation will also involve the carrier or sub-contractor letting your company know of the non-coverage situation.

Many companies are now agreeing to cover the sub-contractor under their insurance only to find out the premium bill for that decision is now very huge.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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