ACORD Forms : How to Complete a Commercial Insurance Application 125The underwriting process for any commercial account begins with the submission of a completed application. This guide will provide assistance in completing the ACORD Commercial Insurance Applicant Information Section.
The Applicant Information Section is the foundation on which the ACORD commercial application program is built. This form contains information that is not duplicated on other ACORD commercial
application forms. The Applicant Information Section is a required part of every commercial submission except Workers Compensation, and no commercial application is complete without it.
Month/day/year on which the form is completed.
Phone (A/C, No, Ext), Fax No.
Producer's telephone and fax numbers.
Producer's name, address and telephone number. In Florida and Nebraska, also include the producers state license number, and in Nebraska, add the agency state license number.
Identification code assigned to the agency or brokerage firm by the insurance company receiving this form.
If the agency uses a sub-code identification system with the company, enter the appropriate code.
Agency Customer ID
Customer's identification number assigned by the agency.
Name of the applicable insurance company. Do not use group names; use the actual name of the company within the group in which you wish to have the policy issued.
Individual company code assigned by the NAIC.
Use these fields to direct the application to a specific company underwriter and company office.
Policies or Program Requested
Use this field to request an independently filed policy or program that may be optionally available from the insurance company. It may also be used to name the subsidiary company in which the line of business will be placed.
Use this field to provide the policy number if a policy has already been issued.
A checklist indicating the other ACORD application sections that are attached to complete the submission. If there are any other additional forms attached enter the form name on the blank line. The form numbers associated with the listed section names are:
Property - ACORD 140
Glass & Sign - ACORD 144
Accounts Receivable/Valuable Papers - ACORD 145
Crime - ACORD 141
Miscellaneous Crime - ACORD 151
Transportation/Motor truck Cargo - ACORD 143
Equipment Floater - ACORD 146
Installation/Builders Risk - ACORD 147
Electronic Data Processing - ACORD 148
Commercial General Liability - ACORD 126
Business Auto - ACORD 127, and ACORD 137 for the state where the
insurance will be written
Truckers/Motor Carriers - ACORD 132, and ACORD 137 for the state where
the insurance will be written
Garage - ACORD 128
Vehicle Schedule - ACORD 129
Boiler & Machinery - ACORD 155
Workers Compensation - ACORD 130
Umbrella - ACORD 131
Additional ACORD forms, such as state-specific forms, may also be filled in.
STATUS OF TRANSACTION
Indicate which company response to this application is expected. If the risk is bound, list the date and the time coverage began and attach a copy of the binder. If more than one option applies, check multiple boxes.
PACKAGE POLICY INFORMATION
Use this section to indicate common effective and expiration dates or common billing and payment plans for package policies.
Proposed Eff. Date
Month/day/year on which the terms and conditions of the policy will commence.
Proposed Exp. Date
Month/day/year on which the terms and conditions of the policy will terminate unless renewed.
Indicate whether the agency or the company (direct) will bill the insured or other payor for the policy.
The plan to be used to pay the company for the policy. Use the company's specific designation for the plan where possible. (e.g., Prepaid, Annual, Semi-annual, Bi-monthly, 40-30-30.)
The audit term for policies that are subject to periodic audit. If the audit period is known, enter the code:
A . . . . . . . . . . . . . . . . . . . . . . . . . . . . annual
S . . . . . . . . . . . . . . . . . . . . . . . . . . . . semi-annual
Q . . . . . . . . . . . . . . . . . . . . . . . . . . . . quarterly
M. . . . . . . . . . . . . . . . . . . . . . . . . . . . monthly
O . . . . . . . . . . . . . . . . . . . . . . . . . . . . other
Name (First Named Insured & Other Named Insureds)
Full name of the applicant as it should appear on the policy. (The first named Insured is given certain rights and responsibilities by the policy contract language. If more than one insured is named, be sure the one intended to receive these rights and responsibilities is named first.) If joint ownership, the name used may include both names (e.g., John and Mary Smith). Wording such as "et al" or "As their interests may appear" is not acceptable as the name of the insured. These phrases do not designate legal entities. Show the federal employment identification number (FEIN) or social security number, if the first named insured is an individual. Also include the phone number and email address (if applicable.)
Mailing Address (of First Named Insured)
The address at which the first named Insured is to receive all correspondence regarding the insurance.Also include the business's website address(es), if applicable.
Form of Business Organization
Identify the applicant as an Individual, Partnership, Corporation,Joint Venture, Subchapter "S" Corporation, LLC or Other. If other, provide a description such as Professional Association.
If there is more than one named insured, provide the form of business organization for each. In the Remarks section list each named insured along with its form of organization. (e.g., The Green Thumb Co., a corporation; John Jones and Bill Smith, a partnership or a joint
venture composed of ABC Contracting Inc. and XYZ Contracting Inc.)
Not For Profit Organization
Check this box if the company is registered as a "Not for Profit Organization". This status affects some rating classifications.
Date Business Started
Provide the date the applicant began in business. This is important because it helps the underwriter determine the expertise and business success of the applicant.
Name and telephone number of the person to contact to arrange for a premises inspection. This should be an individual under the insured's employment, not the insurance agent's name and number.
Accounting Records Contact-Phone
Name and telephone number of the person to contact to arrange for review of the accounting records. This should be an individual under the insured's employment or their accountant, not the insurance agent's name and number.
Location number for this premesis.
Building number for this location. Used when more than one building exists at an individual location.
Street, City, County, State, Zip Code
For each location number, enter the complete physical address (not P.O. Box) including both county and ZIP Code for each location. If there are more than three locations, attach a separate list.
Address should include:
Street number, if any
Pre-direction, if any (e.g., 150 N Central Ave)
Street name, if any
Street type (e.g., st, rd, ave)
Post-direction, if any (e.g., 150 Central Ave N)
If the address does not have a street number and name, provide sufficient information and directions so that the property can be physically located. Provide legal description if required by mortgage holders.
For rating purposes indicate if this location is situated within the city limits.
Indicate the applicant's interest in each location.
Year the building at each location was originally constructed. Specify in the Remarks section any significant additions or renovations and the year they were completed.
List the total number of employees in each building at each location.
Identify the portion of the premises or building occupied by the applicant, such as "entire", "first floor" or "800 sq. ft. on the 10th floor."
NATURE OF BUSINESS/DESCRIPTION OF OPERATIONS
This section is designed to inform the underwriter of what business each applicant performs and the way it is conducted by premises. Operations which may not be apparent in a general description of operations may be segmented by location (e.g., location #1 is the general offices, location #2 is the warehouse).
The section should be completed in enough detail to enable the underwriter to understand and classify each operation. Do not use the classification wording from the Commercial Lines Manual or Workers Compensation Manual. They do not provide adequate detail. Example: a manufacturer of pulley wheels used in sewing machines should be described as such and not as"Metal Goods Mfg. N.O.C."
If the applicant is a manufacturer, describe the:
Raw materials used
Processes or work performed
Products manufactured, who uses them and how they are used
If the applicant is a contractor, describe the:
Type of contractor
Specialized equipment used
Nature of sub-contracts
If the applicant is a merchant, describe the:
Type of operation, wholesale or retail (if both, give the percentage of each)
Merchandise sold, indicate if domestic or foreign manufacture
Services provided, whether or not the applicant delivers
If the applicant is a service organization, describe the:
Type of service performed
Location where services are performed
Applicant's clients (e.g., general public, dentists, banks)
Use the Remarks section to provide additional information for any questions answered with a "Yes" response. The overview below lists the expected information that should be added to the Remarks section for "Yes" responses.
1a. Is the applicant a subsidiary of another entity?
If the applicant is a subsidiary of another organization, identify the parent company and describe the relationship including the percentage owned by the parent.
1b. Does the applicant have any subsidiaries?
If the applicant has any subsidiaries, provide a list and describe each relationship and the percentage owned by the applicant.
2. Is a formal safety program in operation?
Some larger applicants may have formal safety programs. If this applicant does, be sure to provide an explanation of the program activities. This could have a positive impact on the underwriter's acceptance and pricing decisions.
3. Any exposure to flammables, explosives, chemicals?
Provide a description of the exposure, identify the substances involved, explain any hazardous processes, and describe any precautions taken to reduce or control the hazard. If hazardous waste is generated, describe it and explain how it is disposed of.
4. Any catastrophe exposure?
Describe any known exposures of this nature such as: "located on an earthquake fault," "located in a flood plain," or "next to a rocket fuel factory."
5. Any other insurance with this company or being submitted?
Indicate if other insurance is currently written for this applicant by the company. If a submission was mailed to another department recently, note it in the Remarks section along with any policy numbers available.
6. Any policy or coverage declined, cancelled or non-renewed during the prior 3 years?
Provide an explanation of how this situation occurred.
7. Any past losses or claims relating to sexual abuse or molestation allegations, discrimination or negligent hiring?
Provide an explanation if any of the above exposures occurred.
8. During the last five years (ten in RI,) has any applicant been convicted of any degree of the crime of arson? (In Rhode Island, failure to disclose the existence of an arson conviction is a misdemeanor punishable by a sentence of up to one year of imprisonment.)
Rhode Island law requires that all applicants for property insurance must answer this question.
9. Any uncorrected Fire Code Violations?
Describe any violations of applicable building codes that have not been corrected.
10. Any bankruptcies, tax or credit liens against the applicant in the past five years?
If yes, Describe in detail.
11. Has business been placed in a trust?
If yes, provide the name of the trust.
Use this space to provide detailed answers to the General Information underwriting questions outlined above. This space should also be used to provide additional information as required from other sections of the application. If additional space is needed attach a separate list.
Upon completion of the full commercial lines application series, the insured should review the applications and sign this form in the available space.
Upon completion of the full commercial lines application series, the producer should review the applications and sign this form in the available space.The National Producer Number should also be provided.
PRIOR CARRIER INFORMATION
Space is provided to enter up to five years of information for each line of business. This information, along with the loss history below, is required to experience rate the risk. The completeness and accuracy of this information can affect the underwriter's pricing decisions.
COMMON TO ALL LINES
Name of the insurance company that wrote the policy.
Reference identification assigned by the insurance company to identify the policy.
Eff.- Exp. Date
Show the effective and expiration date of the policy.
The reciprocal of the percentage by which the premium shown differs from the manual. Example: if the General Liability insurance manual premium is $1,000, but the actual premium charged was reduced to $680 because of a combination of package, experience and schedule credits, the Modification Factor is .68.
This factor is used by the insurance company to convert premium charged back to manual premium for application of experience rating plans.
The annual modified premium charged (not including taxes or service charges) for the specified line of business.
COMMERCIAL GENERAL LIABILITY
Indicate whether the policy was issued on a Claims Made or Occurrence basis.
If the policy was issued on a Claims Made basis and there was a retroactive date, list the date. If there was no date enter "none".
List the limits as they appeared on the policy declarations page. Limits can be listed following either the ISO simplified Policy Format or the non-simplified policy format.
List the policy type that the previous policy was issued on. (e.g., Business Automobile, Truckers policy.)
List the limits as they appear on the policy declarations page.
The coverage form that the previous policy was issued on. (e.g., Special excluding Theft.)
Bldg./Pers Prop Amount
Indicate if the amount listed is the Building Limit or the Personal Property Limit.
Complete this section for policy history on other lines of business.
Whenever possible, attach a copy of the previous carrier's loss run for each line of business. Loss reports should cover the previous five years of loss history, except in Kansas and New York, which limit the recording of loss history to three years. If loss reports are attached check the "See
Attached Loss Summary" box instead of completing this section.
Check Here if None
Check this box if there are no known losses and no occurrences that may lead to losses over the past five years for all lines of business being submitted.
See Attached Loss Summary
Check this box if a loss summary report is being sent with the application.
Date of Occurrence
Date when the accident or incident occurred that resulted in the filing of a claim.
Line of business involved in the loss (e.g., Automobile Liability, Property, General Liability).
Type/Description of Occurrence or Claim
A brief description of the loss.
Date of Claim
The date on which the loss or occurrence occurred.
If the previous carrier has made any payments on this claim, enter the total amount paid to date.
If the claim is still open, list the reserve amount the previous carrier is holding open for this claim.
Indicate if this claim is open or closed.
Use this section to list any additional, pertinent information that the underwriter should know about the overall exposures of this risk.
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