The revised ACORD 25 Certificate of Insurance removed the provision requiring prior written notice to a certificate holder of any policy cancellation. This change raises the question of how the non-insured party will receive information about the status of coverage for the insured party.
For entities conducting business with motor carriers, this change is complicated by the fact that under a change in the federal regulations, effective March 21, 2011, regulated motor carriers, except for household goods movers and freight forwarders, are no longer required to file proof of cargo insurance. Thus, in those transactions involving the non-excepted motor carriers, one is no longer able to obtain information about cargo coverage from the FMCSA (Federal Motor Carrier Safety Administration) website.
The effect of these changes may be further compounded in those situations when an insured may choose to cancel an insurance policy immediately. In addition to requesting a certificate of insurance, two options that may be available to a certificate holder are to require contractually that it either receive advance notice of cancellation or that the motor carrier will provide prior notice of cancellation.
This article is for general informational purposes only, it is neither legal advice, nor is it intended to be legal advice; and it is not an exclusive statement of statutory or regulatory provisions or case law. Any questions should be submitted to an attorney for his/her analysis.