Why are ACORD insurance forms needed?


Quick Answer

ACORD, or the Association for Cooperative Operations Research and Development, is a non-profit organization that develops standard forms used by insurance agencies and companies, according to its website. Contractors and other businesses are often required to produce a completed "ACORD Form 25: Certificate of Liability Insurance" in order to be eligible to bid on or perform work on projects, according to The Graham Company.

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Full Answer

ACORD Forms provide evidence to a third party that the named insured is covered by insurance. It includes a summary of the insurance policy, but is not the actual policy itself, according to The Graham Company. The forms are a standardized way to comply with federal and state insurance regulations, and ACORD licenses the forms to insurance carriers and agencies, according to the association. Insurance companies produce these forms for customers as needed or upon request, and millions of certificates are issued each year. They are typically one page long and summarize essential information about the policy, including the policy number, insurance limits, and effective dates, according to ACORD.

Other certificate of insurance forms accepted as evidence of insurance that are designed by ACORD include Form 20: Aviation Liability; Form 21: Aircraft Insurance; Form 23: Automobile; Form 24: Property; and Form 28: Commercial Property, according to the organization.

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