By Noelle McCall, CIC, CRM, CISR

Certificates of insurance (known as COI's) can be used for fraudulent activities. Some unscrupulous contractors have provided forged COI's to show proof of insurance to win projects and to avoid paying for insurance premiums when they had no insurance. Despite states requiring basic information on certificates, fraud can still occur due to the ease of manipulation of COI forms. Most COI's are issued on Acord forms, such as Acord 25 which has been filed and approved for use in all 50 states in the USA.

To protect against receiving fraudulent COI's, certificate holders can take the following steps:

1. Require that the contractor's insurance agent/broker or the insurer provide the certificate directly to your company to remove the temptation for fraud.
2. Verify the source of the message with the certificate and the status of the insurance agent or broker to see if the e-mail address you received the COI from shows the insurance agency's or insurance company's name.
3. Confirm that each certificate meets the insurance requirements in your contract with that contractor. Check the COI for required coverages and policy limits. Make sure the date the certificate was issued is current and within the policy effective and expiration dates shown on the COI. Set follow up reminders to request updated COI's before policies expire. There are many companies who offer third party COI tracking services that can do the work for you. 

While fraud cannot be entirely eliminated, reducing the temptation to commit fraud can be achieved by insisting that the contractor's insurance coverage be confirmed directly by the insurance agent/broker or carrier.