Don't Get Duped! This is How to Spot Fake Insurance Certificates

April 11, 2024
Cassandra Gaines

Issuing Certificates of Insurance (COIs) is a significant responsibility for carriers.  These documents serve as a crucial verification tool for project owners and authorities, ensuring workers have the necessary insurance coverage.  However, the importance goes beyond simply providing a document. Carriers have a critical role to play in combating insurance fraud by verifying the authenticity of every COI they issue.

Failing to prioritize this verification process can have serious consequences for both the carrier and the project/business owner. Let's explore why vigilance is essential and the potential risks associated with issuing fake COIs.

Recognizing Signs of Fake Insurance Certificates

Finding a COI template online and falsifying this document is highly effortless. It's as simple as doing a five minute search, so we will give you some simple guidelines to learn how to identify more efficiently when a document is untrue. 

  1. Acord 25: This is the most common insurance form. The first thing you should look for is their logo in the upper right-hand corner and the text "Acord 25" in the bottom left-hand corner. It is most likely a forged certificate if it does not have these signs.
  2. Handwriting & Font: Check that all text on the certificate is consistent and has the same font type. Check the certificate for spelling and grammar errors. The date should be centered. Any alteration in the consistency of the text may result in a false certificate.
  3. The Layout: Familiarize yourself with a real COI. Areas like coverage amounts should be filled or left blank appropriately. Inconsistent layouts might indicate a fake.
  4. Contact Information: Be wary of contact details that replace the insurance company's information with the "carrier's" contact.
  5. Insured Box: You must check that this field is filled correctly. The name in the insured box of an insurance certificate must be the name of the company, not the name of a person. If the name in the box is incorrect, the insurance coverage may not apply.

Legal Consequences of Fraudulent Certificates

Insurance fraud, for at least some lines of insurance, is a crime in every state. One of the main consequences of fake certificates is to be at risk of a lawsuit in which a company can lose a lot of money and penalties. Insurers will file lawsuits in case of an accident or damage.

The Violent Crime Control and Law Enforcement Act (1994) makes insurance fraud a federal crime when it affects interstate commerce. Insurance company employees, including agents, can be punished similarly for embezzlement or misappropriation of any company funds if their actions adversely affect the solvency of any insurance company.

Tech Solutions for Insurance Authenticity

Technology is playing a more significant role in addressing fraud. In 2019, insurers spent nearly $225 billion on IT. Software and insurance tracking services are combined into an easy-to-use solution developed and supported by a team of insurance professionals. 

Carrier Assure goes beyond basic verification. We analyze data to provide a predictive score on a carrier's performance, including compliance with safety and legal regulations.

Manually tracking COIs is time-consuming and prone to errors.  Carrier Assure utilizes data science to provide a predictive score on a carrier's performance, including compliance with insurance and safety regulations. This empowers you to make informed decisions when selecting carriers.

Verifying Insurance Certificates: Best Practices

Here are some essential steps to verify a COI's legitimacy:

  • Confirm Issue Date: Ensure the COI is recent and covers the project timeframe.
  • Verify Details: Match the insurance company name against the carrier you're working with.
  • Review Coverages: Check if the listed coverages align with project requirements.
  • Policy Number Verification: Confirm the validity of the policy number directly with the insurance company.
  • Certificate Holder Accuracy: Ensure the certificate holder's name matches the carrier you're contracting with.
  • Signatures: Verify authorized signatures on the certificate

Empowering your team to identify fake COIs through training can significantly reduce risk. Familiarize them with standard COI formats and potential red flags.

By following these tips and leveraging Carrier Assure's data-driven insights, you can ensure legitimate insurance coverage for your operations.

Remember: Always double-check details, ask questions, and trust your gut. If something feels off about a COI, it might be fake!