Transcript
Imagine this: you are seeing someone and all of a sudden, they just ghost you, or stop responding to you without any warning. Unfortunately, this happens very often.
Now imagine you are working with vendors and all of a sudden, they just cancel their insurance policies or decide not renew without any warning. This vendor “ghosting” will leave your company exposed to risk so it is important to obtain Notice of Cancellation Endorsements. A notice of cancellation would be nice in the dating world, but it is absolutely crucial in the insurance world.
In this video, we will discuss the Notice of Cancellation, including what it is and why companies need it.
A notice of cancellation simply requires your vendors to alert you when they cancel their insurance or decide not to renew it. Typically, the people who will be notified of this cancellation are the additional insureds or any other vested parties listed on the COI.
A very simple Notice of Cancellation is provided on the certificate of insurance in the lower right corner, but this wording is very vague and doesn’t include specific timelines.
A NOC Endorsement lets you get specific about the timeline and who gets notified.
For example, you could require a 30 to 60 day NOC time frame within your contracts or agreements.
If you are requiring NOC’s from your third parties it is important to make sure that you are specifically listed on the endorsement to receive the notice.
Now that you know what a Notice of Cancellation Endorsement is, why do you need it?
You need it so you are aware if your vendor’s insurance is valid and up-to-date. If they are still working for you and their coverage has been cancelled, then you are at risk.
