When dealing with your business’s insurance coverage, you may often hear the term “ACORD” or see the term on your insurance forms. While “ACORD Insurance” isn’t an actual type of insurance, “ACORD” is a standards-setting organization that has created a number of insurance forms that the majority of insurers use.

What is ACORD?

ACORD, which stands for the Association of Cooperative Operations Research and Development, is an international non-profit organization that is best known for its standards-setting work in the insurance industry. ACORD has been around for over 50 years, and much of their work involves setting forth documentation and data standards for insurance organizations, including carriers, reinsurers, brokers, agents, and software vendors.

ACORD is not an insurance company, but it does provide many of the forms and electronic data standards used by the majority of insurance companies around the world. Just like electrical standards allow an appliance power cord to be plugged into any outlet, regardless of who manufactured the appliance or outlet, ACORD standards allow companies in the insurance industry to process data and exchange information efficiently, accurately, and quickly.

What is an ACORD form?

ACORD maintains a large library of standardized forms for the insurance industry, which are used in a variety of ways. From the certificate of liability insurance form (ACORD 25) to the workers’ compensation insurance application form (ACORD 130), ACORD forms provide for standardization and consistency between carriers, brokers, and agents. 

Without ACORD forms, it’s likely that each insurance carrier would end up creating their own unique forms, making it all the more difficult for businesses, carriers, and others to easily exchange data. 

Here are some common ACORD forms you may encounter:

• 25 – Certificate of Liability Insurance
• 27 – Evidence of Property Insurance
• 125 – Commercial Insurance Application
• 126 – Commercial General Liability Section
• 127 – Business Auto Section
• 130 – Workers Compensation Application
• 131 – Umbrella / Excess Section
• 137 – Commercial Auto
• 140 – Property Section
• 152 – Commercial Inland Marine Section
• 160 – Business Owners Application
• 180 – Technology E&O Section
• 188 – Employment Related Practices Liability Section
• 807 – Directors & Officers Liability Section
• 834 – Cyber and Privacy Coverage Section

Why do insurers use ACORD forms?

Insurers, agents, and brokers around the world make use of ACORD forms when dealing with clients and businesses. ACORD standards are leveraged primarily for the following reasons:

• Standardization. ACORD manages, maintains, and continually updates a large library of standardized forms for a number of insurance products and use cases. By having these forms follow a set of standards, it removes ambiguity in the insuring process and allows businesses to receive the same set of information and forms no matter what insurer they are interacting with. It also allows insurers to be able to more accurately conduct business, as they are dealing with standardized applications, and to more efficiently communicate with clients, agents, and brokers.
• Ease of use. ACORD provides its members with access to its full library of forms, which are downloadable in various electronic formats and are also available through third-party software applications. Members can also receive notifications of when forms are updated or modified. 
• International recognition. ACORD forms are recognized by businesses and insurers all across the globe. ACORD boasts over 36,000 members worldwide, and you’ll find that most businesses in the insurance industry trust the ACORD stamp. In fact, it’s common for businesses and insurers to specifically ask for an ACORD form by number, as these forms have become almost ubiquitous in the industry.

What is an ACORD certificate?

The ACORD certificate refers to the ACORD certificate of liability insurance form (ACORD 25). This standardized form is used to summarize all of the essential information on your insurance coverages, including coverage types, policy limits, and dates of coverage. An ACORD certificate can be provided upon request by your insurer. 

As a business owner, you may be asked to show proof of insurance through an ACORD certificate, or you may also request to see an ACORD certificate from vendors, contractors, other third parties you are doing business with. The ACORD certificate is widely recognized and helps to provide proof that a business is properly insured.

Certificate of Insurance (COI)

A certificate of insurance (COI) is a short document that outlines your current insurance policies and verifies that your business has insurance coverage. You may hear the term “certificate of insurance,” “COI,” and “ACORD certificate” used interchangeably. They all refer to the same thing, which is a certificate of insurance. The ACORD certificate is the most common type of COI used.

Keep in mind that a certificate of insurance is purely informational and does not alter or amend any insurance policy. A COI does not serve as an insurance contract, policy, or coverage. Every COI should have qualifying language that states the document is a matter of information only and confers no rights to the certificate holder. 

Final Word

Many of the insurance forms you’ll deal with as you are purchasing coverage for your business will have been created by the ACORD organization. The ACORD label is a good thing—it means your insurer is leveraging internationally recognized, standardized forms that the majority of all insurers make use of. ACORD forms can help you and your insurer exchange information in a more efficient and accurate manner, reducing any confusion or ambiguity when it comes to the insuring process.