02 Jun Changes in “Limits Shown” in the ACORD 25 Certificate of Liability Insurance
One common question we consultants get from our agents is, “What limits do we show on the ACORD 25 Certificate of Liability Insurance?” We always answer with “Show the policy limits on the declarations page.”
The purpose of this change to the ACORD 25 Certificate of Liability Insurance form is primarily to reduce misunderstandings and potential E&O exposure regarding the amount of insurance limits shown on the certificate.
Here is what the revision is trying to accomplish:
- It Clarifies That Limits May Be Lower Than Actual Policy Limits
The new sentence:
“LIMITS SHOWN ARE INCLUSIVE OF AMOUNTS REQUESTED BY THE CERTIFICATE HOLDER AND MAY NOT REFLECT POLICY LIMIT AMOUNTS IN EXCESS OF THOSE REQUESTED.”
This means the certificate may only display the amount of insurance the certificate holder requested, not the insured’s full policy limits.
Example: The insured carries $5 million umbrella liability and $1 million auto liability, but the certificate holder only requested proof of $1 million liability. The ACORD 25 may therefore only show $1 million even though higher limits exist.
This helps avoid assumptions the insured only carries the limits shown, disputes when additional limits are discovered later, and allegations the agent misrepresented the insured’s coverage structure.
- It Protects Agents and Brokers from Misrepresentation Claims
Historically, certificate holders sometimes treated certificates as guarantees of coverage, summaries of all available insurance, or evidence of exact policy terms and limits. That created significant errors and omissions exposure for insurance agents.
The revised disclaimer reinforces that the certificate is informational only, it may not represent the entire insurance program, and policy terms and actual limits govern coverage.
This is especially important in construction contracts, vendor agreements, large umbrella/excess liability programs, and additional insured situations.
- It Addresses “Requested Limits” Practice
For example, the contract requires $1M CGL and $1M Auto, but the insured carries $2M CGL and $10M umbrella.
Agents often issue certificates showing only contractual minimums because it simplifies compliance review, avoids disclosing unnecessary insurance details, and some insureds prefer not to disclose their full insurance limits. The new language formally acknowledges this common industry practice.
- It Adds an Asterisk Regarding Reduced Limits
“LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS” draws additional attention to the fact that aggregate limits may already be eroded. This is particularly relevant for general liability aggregates, professional liability, and certain claims-made policies. It reinforces that the certificate is only a snapshot in time.
Practical E&O Impact for Agents
This revision helps agents defend against allegations such as:
- “The certificate said the insured only had $1 million.”
- “We relied on the certificate as evidence of all available insurance.”
- “The agent failed to disclose higher or reduced limits.”
The change strengthens the longstanding legal principle that a certificate of insurance does not amend coverage, the policy controls, and certificates are informational documents only.
For insurance agencies, this is another example of E&O insurance risk management language being built directly into standardized forms.