I thought this month I’d deviate slightly from the standard ask a question provide an answer format. Insurance documents, often referred to as certificates, are hugely important and we receive lots of questions on them so I thought I’d try and discuss them and answer several regularly asked questions including:
Why is the document I have received a “schedule/ evidence of insurance” and not a certificate?
Must I have the price I pay on the documents?
When you buy a policy of insurance you will receive some policy documents. If the documents are likely to take a few days or longer, often, you will receive a “cover note” or “To whom it may concern” letter as temporary documents as evidence that you have insurance in force. If cover is for insurance that is compulsory by law you will receive a “certificate” of insurance that should comply with the relevant statutory requirements. A valid certificate can only be supplied by regulated and authorised Insurance Companies, Brokers or Intermediaries.
The term certificate of insurance is mostly used for statutory required cover (motor insurance and Employers’ Liability (EL) being the two most common examples). Normally, if the cover isn’t for statutory covers it will be called an “evidence” or “schedule” of insurance, though a few companies do use the term certificate still. So if as a trader a market operator asks to see your certificate, they will normally be requesting sight of your schedule and not the EL certificate.
Policy Documents and what they should contain: Different documents provide different information relevant to the coverage under the policy and any statutory requirements. I’ll do a quick run through of the covers most likely to be held by the average reader. Motor insurance policies (except multi vehicle or fleet policies, which may or may not provide separate certificates for each vehicle) are required to display the following information:
- Vehicle registration number/mark
- Name of Policyholder
- Start and Expiry dates of policy
- Person or classes of person entitled to drive the vehicle (e.g. over 21’s)
- Limitations to use
- Name of Insurance Company
- Policy number
- Confirmation cover meets statutory requirements (RTA standard or higher)
The certificate does not have to state (but may) that cover is Third Party Fire & Theft, Comprehensive etc. and more specific information will be in any key facts or policy wording provided. Nor are any excesses applicable required to be stated on the certificate itself. Market Traders will also have Liability Insurance (or more comprehensive policies should they wish for cover for stock, business interruption and various other covers) at least to enable them to trade at markets and the like, whether it be one specific fixed site or a trader that trades at multiple different sites.
Normally the documents will consist of at least a schedule of cover, if you have EL cover a separate certificate will be provided (this certificate has to be provided by law and also it has to be stored somewhere your staff can check you have cover in force). If you have a more comprehensive policy with more than just Liability, your documents are likely to run to a few pages that follow the main schedule.
Essential Information on the schedule is:
- Name of Policyholder
- Start and Expiry dates of policy
- Business Description
- Name of Insurer
- Policy Number
- Premium, clearly denoting any service charges and Insurance Premium Tax
Depending on how much cover there is under the policy, various other information may fall on the front page or be included on other pages, such as excesses, exclusions and conditions, specific details on sums insured and so forth.
Finally, if your policy includes EL you will receive a separate certificate and this must state:
- Name of Policyholder
- Start and Expiry dates of policy
- Policy Number
- Confirmation that the policy covers a statutory minimum of £5,000,000.
Since EL normally has an inner limit of £5,000,000 for Terrorism but insurers normally offer £10,000,000 as standard, certificates nowadays often just state they offer a minimum of £5,000,000 and will have the actual amount displayed in the policy schedule.
