- Posted by dalegroup
- On March 30, 2016
- 0 Comments
For construction project managers, and others who need proof of insurance from contractors and vendors, important new protection is here: Certificates of Insurance Act takes effect April 10. For everyone in New Jersey who manages construction projects and coordinates the services of multiple contractors, it can be challenging to confirm which building professionals have appropriate insurance coverage with adequate limits. Inaccurate, even outright fake certificates of insurance are the common tools of unscrupulous builders.
But now, the Certificates of Insurance Act — signed into law earlier this year — will take effect on April 10 and make any effort to falsify insurance certificates a serious criminal offense.
“If someone’s looking to game the system by lying about their insurance coverage, this new law should give them serious reason to reconsider,” explains Dan Borgna, vice president of the Dale Group. “In the past, while such activity was obviously frowned upon, enforcement really didn’t have ‘teeth.’ Basically, many individuals felt the reward was worth the risk.”
Under the new law, it’s illegal to issue, request, or require issuance of any insurance certificate that includes false or even misleading information. In addition, the New Jersey Department of Banking and Insurance is granted full enforcement authority. Any violator can be held liable under the state’s Insurance Fraud Prevention Act.
“This is an important consumer-protection law,” Borgna adds. “By curbing improper use of certificates of insurance, it provides increased confidence to project managers and also enhances opportunities for legitimate contractors who play by the rules.”
The new law applies to all certificates that are issued in connection with property, operations, and risk.