How To Complete The ACORD 125, 126 and 140 Forms

All right, folks, I'm just going to warn you at the very beginning of this video, if you're not an insurance agent or broker, this is probably going to bore you to tears. So go ahead and click away, watch one of our other videos and we'll see you next time. For those of you that are in the insurance practice, very excited to share this video with you because it is probably one of the most useful things for anyone who does or wants to write commercial insurance that that is just not available in any sort of useful, instructive way. When I looked for how to fill out an ACORD125 form on YouTube like a year ago, there was literally nothing that was a good, simple, clear, easy to understand thing. So I think a lot of you guys out there will appreciate this just as much as I would have when I was starting out. So in this video, we're going to go step by step with a real live accord 125, 126 and 140 that I have merged together onto a single PDF. It is a fillable document and I went through and highlighted the mandatory fields. In my opinion, mandatory for you to have a smooth and simple underwriting experience with your commercial submission. So we're going to start on the 125 and then go to the 126 and the 140. If you want to skip ahead, check the description. I'll put the timestamps in there of when we move to the next form, the 126 and the 140, so you don't have to stick around to try to find where we are in the scheme of things. So if you have any questions, if there's something you'd like to talk about with the cord forms, please feel free to let me know. And I don't have to say this, I think most of you probably realize it, but I'd love to be able to provide you a copy of this document. We're going to work on here in just a second. But the Accord forms are copywritten material, so obviously, out of respect for their intellectual property, I'm not going to provide you a copy. If you want, you can easily find a fillable copy of just about any Accord form with a simple Google search. A lot of insurance agencies put them out there for people's use for some reason, which I don't understand. That's a subject for another day. So let's go ahead and jump right in to our screen share and do the accord 125, 126, 140. So let's go ahead and get over there. Alright, this is the Accord 125 commercial insurance application. As I said, we've got all of the mandatory fields highlighted. Depending on your unique situation, you may very well find that other fields are also very important. But as a general rule, the ones that are highlighted here are what we need to have. So first thing you're going to do is, is date the form and then you're going to do status of transaction, quote, bind, whatever it happens to be. You don't have to do date and time, any of this other stuff, but designate what it is your line of business. Just check the box for that. You can ignore the premium part. That's never important. Any attachments that are relevant if you're going to be attaching other things like 99.9% of the time. I never attach anything, but it's entirely possible that you may need to. So I highlighted that as well. Policy information you're going to want to include Proposed effective date. This is the date that you want the policy to be active. Your best guess, if it changes later, you don't have to go back and amend this. This is not today's date. This is not a binding date. It's the effective date of the policy and it's assumed that the expiration date is one year later. The rest of the stuff you can ignore. It's not important for the underwriter to process. So for the applicant's information you're going to want to put in their name and mailing address. That is definitely mandatory. And the type of business structure they have. Corporation, llc, whatever it happens to be, you can ignore the GL SIC and naics if you have the federal ein or if it's an individual applicant. If you have their social, go ahead and put it in there. But if you don't, don't kill yourself. Try to get it. The insured is probably not eager to supply that to you anyway, if they haven't already. People tend to be a little bit weird about that stuff in the prospecting process anyway. So phone and website, if you have it, certainly put the phone in there. That's important. The website address will definitely help the underwriter. The last thing you want a commercial underwriter to do is to find information on their own that you didn't supply to them. It makes it seem like you're trying to hide something. So if the applicant has a web address, go ahead and put it there. That saves you some hassle later on trying to explain yourself. These other named insureds you can leave blank. Most of the time they don't apply. In the event that there are multiple named insureds, you're going to want to duplicate that process for the other two. And obviously you're going to have an Accord. I think it's a 45 or a 101 if there's more than three. But I've never had more than three, so go ahead and look it up. I'm not really sure if that's the right number of the Accord. Form contact information. Go ahead and put in the type. Typically I put all or admin or something like that here. If you're dealing with the owner of the company, just put all because they're the ones in charge of everything anyway. Contact name, first and last is fine. Primary phone, primary email. You check the box for which one that is. That's not terribly important as long as they've got phone and email for the premises information, the location, number and building. If there are multiple buildings under one, then go ahead and fill those in too. Let me go ahead and check the box over here for pausing notifications. I apologize there. So description of operations is just going to be basically matching what you have down here. I always just copy and paste the same thing, really. Just a basic one sentence of what they do. It may even be, you know, three or four words. General contractor, residential, roofing, contractor, commercial, whatever it happens to be the rest of the stuff, city limits, interest. All this over here you could ignore completely. That's not mandatory by any means. If you have multiple locations and buildings, go ahead and fill those in as needed. Duplicating the way you do this up here at the top, moving down here, the nature of the business. Check the box that best applies to the applicant. Apartments, etc. Date the business is started. Whatever state you find yourself in probably has a Secretary of State's office. Probably has an entity search here in Texas, where I'm located. We'll get into here in just a second. We have. We'll get into this general liability class code here in just a second. We have an entity search that is from the Texas Secretary of State's office. Your state probably has something similar. So if you know the entity, then you can typically find the necessary information as far as when they were formed right here. So go ahead and check that out and then jump back to our form here. So date business started and a brief description of primary operations. One sentence here is just fine. I typically try to keep this as brief as possible. If there's any operations that the applicant does that are on if any exposure basis, meaning that it constitutes less than 5% of the overall operation of the business. You know, those sorts of things that they do every once in a while, but it's not a part of their regular operation. I would put that down and just tell them in the business operation description here where the, if any exposures are. If there's anything you're gonna want to tell the underwriter, like specifically, we do a ton of contractors. So if we were working with a landscaping company, for instance, and I knew that every once in a while they did some tree trimming, I would put down a landscaping contractor with an if any exposure for tree trimming, probably exactly what I put down. So you can skip this here. Unless you're working with a retail or service operation, then put that in again here. For any other named insureds other than the primary named insured. If you have those, if you have the additional interest information, go ahead and apply it here. It'll save the underwriter some time in applying the additional interest to the policy documents, whatever the interest category might be, and their name and address. Here you. You can leave most of this blank. It doesn't matter. This is honestly the whole Accord way of filling things out is such an antiquated system anyway. It's kind of ridiculous we even still have to do this. But that is another subject entirely. So here we go. And the reason for interest. Email address if you want to fill this stuff in, it's totally acceptable, but most of the time it's not the least bit mandatory. So general information. This is an area that can be very tedious. What I would suggest for you, best practice, if you get a copy of a. I have a library of all of the Accord documents that I have any need for on a regular basis. They are in a fillable format. You should be able to get them from your association. If you're a member of PIA or the Big I in your state, there are a lot of subscription models and companies that will give you fillable versions of Accord library documents for a small fee or an annual subscription. That's a small number. Wherever you want to get yourself a copy, it's a best practice or to go through as I have done and fill in the stuff that's always going to be the same. Like for instance, my agency information and contact information is not going to change from one applicant to another. So I leave that in, fill that in and then save the document so I don't have to fill it in again the next time. When it comes down to these sections here, a lot of the apps have a series of yes or no questions asking for additional information. As you can see here on the screen, I have already answered no to all of them. I find it's a lot easier to change the ones that are yes and fill in appropriately rather than going through and clicking N a bunch of times. It's just inefficient. So for instance, in this case, let's say we wanted to say that there was in fact a safety program in operation. Hopefully there is. Then we check yes and then check the appropriate box for do they have monthly meetings? Do they have an OSHA compliance officer official safety position? Do they have a written safety manual? That's what that question means, et cetera. So that is basically what you'd be looking for there. Let's just move through here. The common ones formal safety program is always a thing I try to pay close attention to because the underwriters certainly do. You can go ahead and read through here or pause the video and look through this stuff. I'm not a huge fan of reading to adults, so I'll try to not do that for you guys. Now you're going to want to be very careful on any policy or coverage declined or cancelled. This question is important. Make sure you pay attention to that and then if they had any safety violations, make sure we put that down. Not all carriers or underwriters are going to pull the records, but they have a lot of databases that you and I typically don't have access to. So you always want to make sure that you're providing information ahead of time. That might be a red flag to an underwriter. Just makes your life a lot easier in the commercial insurance world. So these are all very simple yes or no questions. If there is a yes, make sure you provide information. A lot of times there's a trust involved, especially for the family office and more long term held kind of businesses. So make sure you're asking that question now. Who owns your business? The llc, the corporation, whatever it happens to be. This is becoming more of a thing now. The drone questions is more common than it used to be. So pay close attention there. So prior carrier information, if you are providing them loss runs already, then ignore this part because they're going to have the prior carrier information anyway. Typically on the front end. I leave this alone if I am providing loss runs, if I'm not giving loss runs, or if they don't have any loss runs because they're new in business or newly acquired, then you definitely want to make sure that you are putting that in if it is applicable, if it's newly acquired. So prior carrier goes back up to three years for the app and loss history as well. If again, if you're supplying them with hard copy loss runs, then skip this part because it's entirely redundant. If you're not, go ahead and apply the appropriate information or just check the box if the insured has had no losses and then signature down here, make sure we apply. Let me just go ahead and do this real quick. The applicant's initials there can be helpful. And then down here go ahead and fill this in for yourself. And I can go ahead and put mine in here actually, because I will always be there. I don't fill this in because I'm not in Florida. But if you are in Florida, make sure you put in your producer license number. I always put in the national producer number because that is, that is just part of the identification that they require. So you can find out my NPN if you want to, but I'm not going to give it to you that easily because this is going out over a video that probably a few thousand people are going to look at over the next couple of years. So we've got this information here. We're going to transition now to the commercial general liability section and that is. There you go, 13 minutes or so into it. So for those of you just joining us and skipping ahead to the Accord 126 portion of the video, thanks so much for that. Again, we're looking at the highlighted sections. Date, applicants and effective date are always going to be important for the coverages. You'll notice here I have pre filled these values because that is the default. If we're doing a 2 million per occurrence, 4 million aggregate, then we'll just manually change that. But for the most part it's a 1, 2 sort of proposition for GL. We rarely change those. We'll more likely put an umbrella on top rather than change the 2 4. Just depends on the situation. So for schedule of hazards this is really important. It demonstrates an understanding of the account to the underwriters. It can be very useful in building rapport, especially if you're new working with a carrier underwriter or a GA or MGA underwriter. It can make sure they understand that you know what you're doing. And really it helps if you actually do know what you're doing. Understanding of JL class codes, general liability class codes is one of the big Things that separates great agents from mediocre agents and understanding exactly how a general liability policy is rated and where the exposure comes from. Because I tell you, I win more accounts than any other method of getting in there, driving that wedge, especially with general liability insurance, that part of the commercial world. Because things are not rated correctly where an incumbent agent doesn't understand class codes to the point that they get their rating correct. So making sure your class codes are accurate for a general liability submission is a great way to protect your flank, but also to make sure that your insured is well served. So I'm going to share a resource with you guys that I have found to be very helpful. We're going to go ahead and click over here now. I'm going to put this link in the description of the video. It's classcodes.com generalliabilityclasscodes best practice here because there is an abundance of information on this page and this site. There's a lot going on here. I like to use the control F function for find and I've put in the word contractor here and we're going to go ahead and click through. There's 41 instances of the word contractor on here. I'm going to click through real quick and take you down to number 18 because that is where we're going to get into the section that I want to apply here. Perfect example. If you're dealing with a paper general contractor, a GC that is using 100% subbed out labor, they're not in house. Everything they do is done by an insured subcontractor. This is a very common class code. You're going to want to put in 91580 for a paper GC. And to use the example here we would put location one, hazard one and the class code of 91580. If you look down here under premium basis, you'll see the codes for premium basis you can rate either based on gross sales payroll, the area, which comes in handy when you're talking about property rating for premises liability for instance, and then C for total cost. I don't really use these much at all. I find it it's going to be one of these three here. S for sales, P for payroll or A for area. Every once in a while it'll be C for cost if you're dealing with a subcontractor class code. But it just depends on where where you're coming in for the class codes. So for this one it's going to be S based on the exposure which in this case is top line sales or gross revenue. So let's say we had $800,000 in revenue as a paper GC. Typically you're going to find the other class codes. I don't put the premium basis for subcontractors typically because a lot of our carriers, if we are rating here we can simply put included or incl. And a lot of these carriers will include the subordinate class codes like 91581 or 828384, whatever the case may be. Each one of these subcontractor codes, if you look at it, they're for a different kind of work. And if we get all the way down to the noc, which stands for not otherwise classified, there's a lot that goes into 91585 because it doesn't fit into one of these four up here. So a broad understanding of general liability class codes is essential if you're going to be a competence advisor in the general liability and commercial insurance space general. So that's really all you need. These four fields, the rest of this you can leave blank. In this case I like to go and pull it directly from the NAIC or ISO. Whatever, whatever the guidelines happen to be. I'll just copy and paste directly from the list there. So moving on now. Claims made. We're not going to fill this part out because we're writing this policy on an occurrence basis. The vast majority of all of our general liability policies are going to be written on an occurrence basis. So make sure we check both of those boxes there. We don't typically write deductibles for our GL or we allow the underwriter to assign them for us. That's a very small part of the overall package. So we're going to skip the claims made part here entirely. We don't write a lot of employee benefits liability so we typically skip that. If this is important to you, then just fill those in for contractors again you'll see most of this has been pre filled as no. We're going to go ahead and put in any information that is important. If it's a yes, describe the type of work contracted and answer these questions. If it applies to your insured, the amount and percentage of work subcontracted as well as the full time and part time staff both. If your insured has hard copy tangible completed operations, make sure you're putting this in. If they create a tangible product, they deliver a tangible good to a client or customer of theirs. Make sure we're putting this information in here. Typically if we had A home builder for instance, or a toy manufacturer. Let's say you would be putting in the basics here. And if you needed to also attach an Accord 101 for additional information. An Accord 101 is just one big single piece of paper that has a large box that you can basically type in whatever remarks you want to. It's kind of a catch all form. So moving forward now explain all of the yeses for this. This is just your standard battery of general liability questions. Again, I've pre filled all of them as no, so we can change them as needed. And this, this form is so antiquated because there's so many of these questions that don't apply to anybody nowadays. You know, there's one of my favorites down here, you know, radioactive nuclear materials that might apply to, you know, half of 1% of all insureds, maybe probably even less than that. You know, the athletic team sponsored social event sponsor, that's, that's still relevant. But an athletic team sponsored. We're talking about a very, very, very small number of people and it's on a general industry wide document here. So it's kind of silly some of these questions because the vast majority of them are always going to be no. It just depends on the insured. So this is one that's really important. Number 21 here you're going to want to pay close attention to. Do they have a formal written safety and security policy? I'll go ahead and highlight this because it's a pretty important question. So that one there definitely need to be filled out. And the signature here, go ahead and do as before. Where you've got producer signature, applicant producer name, you'll notice it pre filled from the last time because the name of the field is the same national producer number and date as well, those are required. Unless you're in Florida, don't bother putting your producer license number there. No one cares unless you're in Florida. So we're now at the 21:30 mark. And welcome for all of you that skipped ahead to the Accord 140 for the property section. We are in the home stretch. Now this one is really straightforward. You're going to put the date for the application. Most of the time it's going to be the same date for the other two pages. Put down your named insured. If you have more than one named insured, separate with a comma and the effective date that you are seeking for this. If you have a blanket coverage, if you've got a bunch of properties that are insured on A blanket basis. Then go ahead and put that information here with the number and the amount and the type. Most all of the stuff that we're doing is going to be individually underwritten. So we don't typically write blanket property. We can do blanket AI. Of course, that's fairly common, pretty common in the contract world, especially blanket property we don't see very often. So I left that one as not mandatory premises information. Again, you're going to put the premises number and building number. Think of it as two different areas. If you got a complex with the same basic area and four buildings connected by a parking lot, then that's what you would put down here for, you know, building one, building two and so on. But they're all the same premises. If they're down the street from each other, they're going to be two different premises. I'm not sure what the plural of premises is. Is it premise I or, you know, I don't know, it's one of those words that I don't think I ever say correctly. So street address here, building description, they're really simple, you know, commercial office building or whatever it is you're going to put down. Subject of insurance. This is going to be the category of insurance. If you hold still, a lot of times you'll have the preset instructions there. Now, I usually just put the whole word out. Building for building, BPP for business, personal property. If we're going to do business income with extra expense, I usually just bi ee. So the underwriter, the one who's coding this in, knows what we're talking about. The amount is just the dollar value. The coinsurance applies to the coinsurance clause, which typically is 80, 90 or 100%. That's obviously a different conversation for a different day. But the coinsurance penalty applies if they underinsure to true replacement value. Most favorable of the common options is going to be 80%. We typically put that down unless we're using giving up a higher coinsurance in exchange for premium reduction credits, which that's pretty typical, depending on certain class codes. So in this case, put the valuation down. Actual cash value, agreed value or replacement cost value. Those are typically the three that we use. Cause of loss, Basic, broad or special. Of course, you know that if you have written really anything in the property space, if you haven't, we have a video here on the channel breaking down the differences in covered causes of loss. Basic, broad and special. Go ahead and check it out. I can link to the video in the description and you can follow up with me. There if you have any questions, additional coverage options, restrictions, endorsements and rating information. A lot of this is not going to apply. You know, we don't have sinkhole coverage in Texas. Mine subsistence is going to be a more of a Midwest thing. We don't have a lot of these things here. Boilers are pretty uncommon in most of the country unless you're in, you know, up in the Northeast or it's somewhere where it freezes a lot in the wintertime. So again, here we highlighted the ones that you need to put down. Construction type, building improvements and then stories, basements, depending on where you are year built and total area. Go ahead and fill those in every time if at all possible. Most of the rest of this you can leave blank. Go ahead and put in the additional interest if you have it. You know, mortgagee, lost payee, etc. Name and address here you can leave the rest as well blank. Most of the time it's not important. On the Accord application, these other two pages are simply going to be duplicates. So we've got the. The first page here of the Accord 140 and these other two pages are one page, excuse me, is a duplicate of the first. You can carve this out and repeat it as many times as possible. If you have say six buildings or 10 buildings or whatever, then you can do that. There is another Accord form for a scheduled property policy where you can put in a number of addresses if you wanted to list them all out individually. I'm not sure off the top of my head what that is, but if you Google or look through your Accord form list for scheduled property or bulk or something like that, you'll be able to look it up. There's a different Accord form if you're trying to include a large number of properties altogether. So that's it for the Accord 140. Critical information. Same information for the signature here and then obviously the same signature area as the other ones we've already talked about. So that is about it for the walkthrough on the Accord 125, 126 and 140. Again, we welcome your questions here and it goes without saying, if you got value out of this video, please tell me. Take a moment and subscribe to the channel. Go ahead and like this video and share it with another insurance agent or broker colleague of yours that you think would appreciate this information. Thanks again for watching. Make it a great day, boys and girls. And please remember, life is risky risk. Well.