Certificates of insurance (COIs) are issued to you by Insurers, partly as a guarantee that there’s an actual policy behind an Insured for a particular risk, and partly as a summative document that describes the terms of that policy. Translation: it’s not a legal document.

Another translation: they CAN be faked. In fact, anyone with a laptop and some editing software can make fake certs, which adds one more to our growing list of reasons why compliance personnel need to verify everything they come across. The million dollar question is, do you how to tell the real certs apart from the fakes?

Fake Certificates

Even if COIs don’t hold legal weight, they’re still pretty invaluable when it comes to compliance tracking, and in that regard, fake COIs can place you and your firm in deep trouble if you fail to do your due diligence and distinguish adequately.

Fake Certificates are Incredibly Easy to Make

A good percentage of vendors and contractors, thankfully, will be upfront with you and give you a real COI from the get-go. There’s a small minority however that will opt for an easy way to get jobs without putting in the investment to insure themselves first. They’re the kind you’d want to watch out for.

There’re many COI templates out there on the Internet, unfortunately, which has only helped the case of these fraudulent contractors. These won’t present much of a problem if you know precisely what to look for when verifying the veracity of a particular certificate. However, that might not be as easy as it sounds all of the time, especially to the untrained eye.

So how do you know a cert is real? There are a few questions that you need to ask:

Does it use an Acord 25 form?

When you ask for a Certificate of Liability Insurance form, they usually give you an Acord 25 form. If the COI you got does not say Acord 25 anywhere on the page, then there’s a high chance that you’re dealing with a fake form.

Is the Company Legit?

Real Insurers don’t typically shy away from leaving their contact information, and you’re sure to find one on a legitimate COI. If you don’t, that should be a big red flag for you. If it does, take note of it, and give it a call to see if anyone responds. When somebody answers on the other end of the line, that’s a good sign; if not, then start asking some questions and do a bit more digging.

An alternative – and perhaps quicker – way of doing this part of the verification process is to go to www.ambest.com and look for the company in question. This site is a global rating agency that focuses mainly on insurance companies. If the company is legitimate, they’ll be listed there.

Is the form formatted/filled up appropriately?

One of the most prominent tell-tale signs that a document has been doctored is the mismatched fonts and inconsistent handwriting that plagues the majority of them. Pay particular attention to the dates on the certificate; if the fonts there are mismatched with the rest of the document, inform the Insured or the Insurer immediately to verify.

So, Is a COI Enough?

So we’ve established that COIs can indeed be faked. If so, are COIs enough? Are they even necessary at all, given the facts above?

Of course. COIs save you time, actually, by allowing you to record and tabulate the contents of a policy quickly and easily. For that fact alone, COIs are incredibly essential documents that you need to ask for every time you get the chance. Moreover, while they can be faked easily, as we’ve shown, they can also be verified easily with a simple call.

As with all things in the compliance tracking game, you simply need to be vigilant in verifying the information from COIs and cross-referencing them with other primary documents and with what Insurers and your Insured have to say.

But how will you do that if you’re spending too much time on the menial tasks of data entry and COI tracking? That’s why you need automation in those areas through smart software like COI Tracker which frees up your hands so you could pay attention to the things that really count.Try it for free today and revolutionize the way you track compliance today.