Illegal Insurance Certificate Requests Happen all the Time – One of the Industry’s Worst Kept Secrets:
Illegal Insurance Certificate Requests; Ladies and Gentlemen, If it’s not in the policy, we as brokers cannot — by law — put it on the certificate. Not for a GC; Not for a property manager; Not for an owner; Not for a lender. Not for “my legal department insists.”; And no, not even for a governmental authority with a fancy letterhead.
Yet every hour, brokers are asked to create coverage via certificates as if certificates were endorsement vending machines.
Spoiler: Magic is not covered by ISO.
The Law (Yes, It Actually Exists), Under NYS Insurance Law §§ 501–502, it is illegal to: “…add terms, conditions, warranties, guarantees, or language not expressly included in the policy…” and illegal for any party to: “…willfully require such language as a condition of work, payment, or contract…” Much of the language being requested on certificates describes legal concepts—not coverage that actually exists in the policy.
Translation: Certificates are evidence of insurance, not post-loss fan fiction.
The top of every certificate STATES:
THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE…
THIS CERTIFICATE DOES NOT CONSTITUTE A CONTRACT…
The Fine, yes there is a fine, NYS DFS enforces this: $1,000 first violation + $2,000 each subsequent (§503).
I served on the committee that enacted this law in 2015. The intent was clear:
- Certificates ≠ mini-contracts
- Certificates ≠ endorsements
MYTHS Brokers Hear Constantly
- “Just put it on the cert — we’ve always done it that way.”
- “Legal says the cert must say X.”
- “Add Third Party Action Over to the cert.”
- “We need the contractual liability to cover the contract.”
- “We won’t pay you until you issue the cert.”
- “GCs need it for risk transfer.”
FACTS (a.k.a. Reality + Law)
- Policies dictate coverage
- Legal should read §502 before mandating creative writing.
- If it’s not in the policy, it’s not going on the certificate.
- The policy is the contract; the certificate is the receipt.
The Real Point
Brokers/Agents aren’t trying to be ‘difficult’ we are:
- Protecting clients
- Protecting carriers
- Avoiding penalties
- Preventing coverage misunderstandings
If the issue is risk transfer, indemnity, or additional insured status, solve it in the contract or the policy — not through illegal COI demands.
Final Thought on Illegal Insurance Certificate Requests
- Insurance has enough complexities.
- We don’t need to invent new ones through certificate myth-making.
- Stop requesting brokers and agents to do illegal things.
- Start asking how to solve the actual coverage problem.
- Happy to talk to brokers, clients, GCs, PMs, owners, or authorities who want to understand this — ideally without a DFS citation.
Disclaimer: This article is provided for general informational and educational purposes only and does not constitute legal advice or an interpretation of any insurance policy.
