How should insurance requirements in contracts be changed in order to respond?

Contract language requiring insurance certificates to state that “__ days notice of cancellation be given” and requiring that the “endeavor to” language in the certificate be deleted, is no longer applicable. Even if changes are made to the certificate, ACORD has made it exceedingly clear that changes to the certificate do not change the policy.

The contract should require that the insured party provide immediate notice to the owner, lessor, etc. if the insured entity receives notice of cancellation or nonrenewal from its insurer. This provision is especially important since many insurers will not be willing to comply with the recommendations below, especially for smaller insureds. Unfortunately, this has the obvious drawback of depending on the very party who is non-performing to report the non-performance.

Contracts should require that the insured’s policies be endorsed to meet the certificate holder’s reasonable requirements. (However, as stated above, not all insurers will be willing to cooperate.) If the insurer is somewhat cooperative, it may be willing to extending the same notification rights to the certificate holder that it gives to the first Named Insured. Below is sample manuscript endorsement wording that would accomplish that end. Very large insureds may be able to obtain even broader notification rights.

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