On another forum I was discussing the 30 day notice of cancellation and how in the old days of the Accord form the word endeavor made it a bit of an illusions. I mentioned that there are times that 30 days notice is impossible to supply because there are times that no notice can be given.
"For example, insureds often sign contracts where they agree that the other party will be provided 30 days (or more) notice of cancellation. The insurer will not provide this notice, but the agency voluntarily agrees to do it. What if the insurer cancels the policy for nonpayment with 10 days notice? The agency has issued a certificate indicating that the certificate holder will receive 30
days notice. Does the agency plan on paying the premium for extending the policy period another 20+ days (and will the insurer actually do this)?
Most contracts the insured enters into that require notice of cancellation do not specify whether that applies to cancellation by the insurer or the insured. Again, how does the agency plan on providing 30 days notice if the policy has been terminated by the insured? The agent most likely has no legal standing to extend the policy period."
On ISO form IL 00 17 11 98
A. Cancellation
1. The first named insured shown in the Declarations may cancel this policy by mailing or delivering to us advance written notice of cancellation
2. We may cancel........
a. 10 days before the effective date of cancellation if we cancel for nonpayment of premium.
On another forum a person states they were in the insurance business for 25 years but now works as a risk manager for a company. The risk managers idea is to make the agent / broker the entity to take on the risk of sending the notice of cancellation.
This is his idea of who should handle all notices of cancellation ---
"Brokers providing a letter that they WILL mail notice of cancellation. Put their E&O on it if they don't. They make too much money for this not to be the answer."
Sorry but I will not play insurer of choice especially when there are times (noted above) that I can't stay out of a breech in the agreement. If the insurer is giving 10 days written notice for nonpayment, how can anyone give a 30 day notice of cancellation??????
This is what the city of Atlanta Department of Law determined about the 30 day notice of cancellation. http://www.aci-na.org/static/entransit/Caput--Legal Aspects of Airport Insurance.pdf
<<Additional Insured/Notice of Cancellation Issues: City’s decision:
City no longer requires direct notice of cancellation; accordingly, no conforming
certificate or endorsement required
City requires contractor to fax copy of insurer's cancellation notice within 2 business days of receipt>>
So if the city of Atlanta feels it is not that important to have a third part send a notice, what makes much smaller General Contractors feel they are entitled to it? Requiring the Notice of cancellation endorsement wastes time, it wastes resources and increases the cost of projects.
The city also found ---
"In the last 15 years, there have been no known incidents linked to cancelled contractor insurance"
So for such an entity that issues many, many, many contracts has never had a problem in 15 years....perhaps there is not much of a problem?
I find it an egregious request that any risk manager (ex agent) would expect an agent / broker to take on a risk that can not be fully controlled.
Also the Internet allows people to say they are this or that, give years of experience that can't be proven. To have the risk manager say this makes me wonder if he was in the business 25 years because not all brokers are well heeled. "They make too much money for this not to be the answer." There are many, many minimum premium CGL policies that you make what --- $60 a year commission? That isn't a great amount of money made off a policy --- is it?????
"For example, insureds often sign contracts where they agree that the other party will be provided 30 days (or more) notice of cancellation. The insurer will not provide this notice, but the agency voluntarily agrees to do it. What if the insurer cancels the policy for nonpayment with 10 days notice? The agency has issued a certificate indicating that the certificate holder will receive 30
days notice. Does the agency plan on paying the premium for extending the policy period another 20+ days (and will the insurer actually do this)?
Most contracts the insured enters into that require notice of cancellation do not specify whether that applies to cancellation by the insurer or the insured. Again, how does the agency plan on providing 30 days notice if the policy has been terminated by the insured? The agent most likely has no legal standing to extend the policy period."
On ISO form IL 00 17 11 98
A. Cancellation
1. The first named insured shown in the Declarations may cancel this policy by mailing or delivering to us advance written notice of cancellation
2. We may cancel........
a. 10 days before the effective date of cancellation if we cancel for nonpayment of premium.
On another forum a person states they were in the insurance business for 25 years but now works as a risk manager for a company. The risk managers idea is to make the agent / broker the entity to take on the risk of sending the notice of cancellation.
This is his idea of who should handle all notices of cancellation ---
"Brokers providing a letter that they WILL mail notice of cancellation. Put their E&O on it if they don't. They make too much money for this not to be the answer."
Sorry but I will not play insurer of choice especially when there are times (noted above) that I can't stay out of a breech in the agreement. If the insurer is giving 10 days written notice for nonpayment, how can anyone give a 30 day notice of cancellation??????
This is what the city of Atlanta Department of Law determined about the 30 day notice of cancellation. http://www.aci-na.org/static/entransit/Caput--Legal Aspects of Airport Insurance.pdf
<<Additional Insured/Notice of Cancellation Issues: City’s decision:
City no longer requires direct notice of cancellation; accordingly, no conforming
certificate or endorsement required
City requires contractor to fax copy of insurer's cancellation notice within 2 business days of receipt>>
So if the city of Atlanta feels it is not that important to have a third part send a notice, what makes much smaller General Contractors feel they are entitled to it? Requiring the Notice of cancellation endorsement wastes time, it wastes resources and increases the cost of projects.
The city also found ---
"In the last 15 years, there have been no known incidents linked to cancelled contractor insurance"
So for such an entity that issues many, many, many contracts has never had a problem in 15 years....perhaps there is not much of a problem?
I find it an egregious request that any risk manager (ex agent) would expect an agent / broker to take on a risk that can not be fully controlled.
Also the Internet allows people to say they are this or that, give years of experience that can't be proven. To have the risk manager say this makes me wonder if he was in the business 25 years because not all brokers are well heeled. "They make too much money for this not to be the answer." There are many, many minimum premium CGL policies that you make what --- $60 a year commission? That isn't a great amount of money made off a policy --- is it?????
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