ACORD 25 vs ACORD 27: Key Differences Explained

ACORD 25 vs ACORD 27: Key Differences Explained

Meta Title: ACORD 25 vs ACORD 27: Key Differences 2025 Meta Description: Compare ACORD 25 vs ACORD 27 certificates. Learn key differences, when to use each form, what coverage they show, and which your business needs. Complete guide with examples. URL Slug: acord-25-vs-27-comparison Focus Keyword: ACORD 25 vs ACORD 27 Keywords: ACORD 25 vs ACORD 27, liability vs property certificate, ACORD form differences, ACORD 25 explained, ACORD 27 explained, certificate of insurance forms, insurance certificate types Template: Comparison Word Count: 2,156 Estimated Readability: 63 (High School level) ---

Table of Contents

1. Introduction: Why Understanding ACORD Forms Matters 2. What is ACORD 25? 3. What is ACORD 27? 4. Side-by-Side Comparison 5. When to Request ACORD 25 vs ACORD 27 6. Pros and Cons of Each Form 7. Which Should You Request? 8. Common Mistakes to Avoid 9. Frequently Asked Questions --- If you've ever requested proof of insurance from a contractor, tenant, or vendor, you've likely encountered the terms ACORD 25 vs ACORD 27. These two standardized forms are the backbone of insurance verification in the United States, but they serve distinctly different purposes and show completely different types of coverage. Understanding the difference between ACORD 25 and ACORD 27 is critical for ensuring your business has proper insurance protection. In this comprehensive guide, we'll break down everything you need to know about ACORD 25 vs ACORD 27, including what each form covers, when to request each one, and how to verify the information they contain. By the end, you'll know exactly which certificate to request for any business situation.

What is ACORD 25?

ACORD 25 is a Certificate of Liability Insurance that provides proof of liability coverage. It's the most commonly used insurance certificate in business-to-business transactions, accounting for approximately 90% of all certificates of insurance issued in the United States. ### Coverage Types on ACORD 25 The ACORD 25 form displays the following types of liability insurance: 1. General Liability Insurance - Bodily injury and property damage caused by your business operations - Personal injury (libel, slander, defamation) - Advertising injury - Medical payments (regardless of fault) - Products and completed operations liability 2. Commercial Auto Liability - Bodily injury and property damage from vehicle accidents - Coverage for owned, hired, and non-owned vehicles - Separate limits for owned vehicles vs. hired/non-owned 3. Umbrella/Excess Liability - Additional coverage that sits above primary liability policies - Typically provides $1-5 million in extra protection - Broader coverage than underlying policies 4. Workers' Compensation - Coverage for employee work-related injuries and illnesses - Required by law in most states if you have employees - Includes Employers Liability coverage (Part B) 5. Other Liability Coverages - Professional liability (errors & omissions) - Pollution liability - Cyber liability - Employment practices liability ### Who Uses ACORD 25? ACORD 25 is requested by: - General contractors (from subcontractors) - Property owners (from contractors working on their property) - Event venues (from vendors and service providers) - Clients (from consultants and professional services) - Commercial landlords (from business tenants) The ACORD 25 answers the question: "If this vendor causes injury or damage, does their insurance cover it?" ### Key Information on ACORD 25 Every ACORD 25 certificate includes: - Insured's name and address (the business carrying the insurance) - Certificate holder (the party receiving proof of insurance) - Insurance company names and NAIC codes - Policy numbers and effective dates - Coverage limits (per occurrence, aggregate, etc.) - Additional insured status (whether certificate holder is covered) - Waiver of subrogation (if applicable) - Cancellation notice (typically 30 days)

What is ACORD 27?

ACORD 27 is an Evidence of Property Insurance form that provides proof of property and inland marine coverage. While less common than ACORD 25, ACORD 27 is essential for real estate transactions, commercial leases, and situations where physical property needs protection. ### Coverage Types on ACORD 27 The ACORD 27 form displays the following types of property insurance: 1. Building Coverage - Physical structure coverage (walls, roof, foundation, HVAC, etc.) - Attached fixtures and improvements - Typically written on replacement cost or actual cash value basis - Shows building address, construction type, and occupancy 2. Business Personal Property (Contents) - Furniture, equipment, inventory, and supplies - Tenant improvements and betterments (for lessees) - Tools, computers, and office equipment - Usually separate limit from building coverage 3. Business Income/Extra Expense - Lost income if business operations are interrupted - Extra costs to maintain operations during repairs - Typically includes extended period of indemnity 4. Inland Marine Coverage - Equipment floaters (portable tools, cameras, laptops) - Valuable papers and records - Accounts receivable - Transit coverage for property in shipment 5. Causes of Loss - Basic form: Fire, lightning, explosion, windstorm, hail, etc. (11 named perils) - Broad form: Basic perils plus falling objects, weight of snow, water damage (17+ perils) - Special form: All-risk coverage (all perils except specifically excluded) ### Who Uses ACORD 27? ACORD 27 is requested by: - Commercial landlords (from tenants to prove property insurance) - Lenders and mortgage companies (to protect collateral) - Property managers (for tenant compliance) - Lessors (from lessees renting space or equipment) - Building owners (from tenants making improvements) The ACORD 27 answers the question: "If this property is damaged or destroyed, does insurance cover it?" ### Key Information on ACORD 27 Every ACORD 27 certificate includes: - Property location and description (address, construction type, occupancy) - Coverage amounts (building, contents, business income) - Perils covered (basic, broad, or special form) - Deductibles (amount insured pays before insurance kicks in) - Mortgagee/loss payee (lender or party with financial interest) - Coinsurance percentage (typically 80%, 90%, or 100%) - Policy effective dates

ACORD 25 vs ACORD 27: Side-by-Side Comparison

Here's a comprehensive comparison of ACORD 25 vs ACORD 27: | Feature | ACORD 25 | ACORD 27 | |---------|----------|----------| | Official Name | Certificate of Liability Insurance | Evidence of Property Insurance | | Primary Purpose | Prove liability coverage exists | Prove property coverage exists | | Coverage Type | Liability (injury & damage to others) | Property (damage to insured's property) | | Most Common Use | Contractor/vendor verification | Commercial lease requirements | | Frequency | ~90% of all COIs | ~10% of all COIs | | Typical Coverage | General liability, auto, workers' comp, umbrella | Building, contents, business income, inland marine | | Who's Protected | Third parties (injured people, damaged property) | First party (the insured's own property) | | Additional Insured | Yes (common requirement) | N/A (not applicable to property insurance) | | Certificate Holder | Party requiring proof (client, landlord, venue) | Lender, landlord, or party with financial interest | | Renewal Frequency | Annually (typical) | Annually (typical) | | Required By | Clients, general contractors, event venues | Landlords, lenders, lessors | | Limits Shown | Per occurrence, aggregate, combined single limit | Total insured value, deductibles, coinsurance | | Key Question Answered | "Are third parties protected from this vendor's actions?" | "Is this property protected if damaged or destroyed?" | ### Visual Example: When to Use Each Form Scenario 1: Hiring a Painting Contractor - Request: ACORD 25 - Why: You need proof they have general liability (if they damage your property) and workers' compensation (if their employee is injured on your site) - Coverage to verify: General liability ($1M+), workers' comp, commercial auto Scenario 2: Leasing Commercial Office Space - Request from landlord to tenant: ACORD 25 (liability) + ACORD 27 (property) - Why ACORD 25: Protects landlord if tenant's operations cause injury or damage - Why ACORD 27: Proves tenant insured their own contents and improvements - Coverage to verify: Tenant liability ($1M+), tenant property coverage matching lease improvements Scenario 3: Mortgage on Commercial Building - Request: ACORD 27 - Why: Lender needs proof the building (their collateral) is insured for replacement value - Coverage to verify: Building coverage ≥ loan amount, lender named as mortgagee/loss payee

When to Request ACORD 25 vs ACORD 27

Knowing when to request ACORD 25 vs ACORD 27 ensures you have proper insurance protection: ### Request ACORD 25 When: ✅ Hiring contractors or subcontractors (construction, repairs, maintenance) ✅ Engaging vendors (event vendors, service providers, consultants) ✅ Allowing non-employees on your property (delivery drivers, installers) ✅ Entering service agreements (IT support, cleaning services, security) ✅ Hosting events (requiring vendor/participant liability coverage) ✅ Professional services (lawyers, accountants, consultants with E&O insurance) Key principle: Request ACORD 25 when you need to verify the other party has insurance to cover injuries or damage they might cause to you or third parties. ### Request ACORD 27 When: ✅ Leasing commercial property (as landlord from tenant) ✅ Lending money secured by property (as lender from borrower) ✅ Renting equipment or space (as lessor from lessee) ✅ Tenant makes improvements (ensuring tenant improvements are insured) ✅ Property management (verifying tenant property insurance per lease) ✅ Construction projects (builder's risk or installation floater insurance) Key principle: Request ACORD 27 when you need to verify the other party has insurance to cover damage or loss to physical property. ### When You Need Both ACORD 25 AND ACORD 27 Many business relationships require both forms: Commercial Lease Agreements - ACORD 25: Tenant liability coverage protects landlord from slip-and-fall lawsuits, tenant-caused fire damage, etc. - ACORD 27: Tenant property coverage ensures tenant can replace their own contents, protecting them from financial loss Construction Projects - ACORD 25: Contractor liability and workers' compensation - ACORD 27: Builder's risk insurance covering the project while under construction Equipment Rental - ACORD 25: Renter's liability in case equipment causes injury or damage - ACORD 27: Inland marine or property coverage for the equipment itself

Pros and Cons of Each Form

### ACORD 25 Advantages and Limitations Advantages: - ✅ Widely recognized and standardized across all industries - ✅ Covers multiple policy types on one form (liability, auto, workers' comp, umbrella) - ✅ Allows additional insured endorsements (extends coverage to certificate holder) - ✅ Easy to compare across different insurance providers - ✅ Most insurance agents can issue within 24 hours Limitations: - ❌ Does NOT show property coverage (need ACORD 27 for that) - ❌ Does NOT prove actual endorsements exist (need to verify with insurer) - ❌ Abbreviations and industry jargon can confuse non-insurance professionals - ❌ Certificate can be issued even if policy is canceled (verification needed) ### ACORD 27 Advantages and Limitations Advantages: - ✅ Clearly shows property values, locations, and construction details - ✅ Specifies perils covered (basic, broad, special form) - ✅ Shows mortgagee/loss payee information for lender protection - ✅ Includes coinsurance clause details (important for proper coverage) - ✅ Demonstrates tenant financial responsibility in commercial leases Limitations: - ❌ Does NOT show liability coverage (need ACORD 25 for that) - ❌ Less familiar to non-real estate professionals - ❌ Requires detailed property information (appraisals, replacement cost estimates) - ❌ More complex to verify (building values, coinsurance compliance, etc.)

Which Should You Request?

Use this decision tree to determine ACORD 25 vs ACORD 27: ### Decision Framework Question 1: What's the primary risk? - Risk is injury or damage to others → Request ACORD 25 - Risk is damage to physical property → Request ACORD 27 - Both risks exist → Request both forms Question 2: What's the relationship? - Hiring vendor/contractor → ACORD 25 (liability) - Leasing to tenant → ACORD 25 (tenant liability) + ACORD 27 (tenant property) - Lending on property → ACORD 27 (property coverage with lender as mortgagee) - Event vendor → ACORD 25 (general liability, possibly liquor liability) Question 3: What does your contract require? - Check insurance clause in your contract, lease, or service agreement - Follow contractual requirements exactly (coverage types, limits, endorsements) - Request both forms if contract specifies liability AND property coverage ### Industry-Specific Recommendations | Industry/Scenario | Recommended Form(s) | Key Coverage to Verify | |-------------------|---------------------|------------------------| | General Contractor → Subcontractor | ACORD 25 | General liability ($2M), workers' comp, auto liability, additional insured | | Property Manager → Commercial Tenant | ACORD 25 + ACORD 27 | Liability ($1M), tenant contents coverage, additional insured for landlord | | Event Venue → Caterer | ACORD 25 | General liability ($2M), liquor liability (if serving alcohol), products liability | | Bank → Commercial Property Owner | ACORD 27 | Building coverage ≥ loan amount, special form, bank as mortgagee | | Client → IT Consultant | ACORD 25 | General liability ($1M), professional liability/E&O ($1M), cyber liability | | Property Owner → Maintenance Contractor | ACORD 25 | General liability ($1M), workers' comp, commercial auto |

Common Mistakes to Avoid

When working with ACORD 25 vs ACORD 27, avoid these common errors: ### Mistake #1: Requesting the Wrong Form ❌ Wrong: Requesting ACORD 25 from a tenant when you need to verify property coverage ✅ Right: Request ACORD 27 for property insurance, ACORD 25 for liability insurance ### Mistake #2: Not Verifying Additional Insured Status ❌ Wrong: Assuming "additional insured" box checked means endorsement exists ✅ Right: Request copy of actual endorsement from insurance agent to confirm ### Mistake #3: Accepting Expired Certificates ❌ Wrong: Filing COI without checking expiration date ✅ Right: Set up alerts 60, 30, and 15 days before expiration to request renewals ### Mistake #4: Ignoring Coverage Limits ❌ Wrong: Accepting any certificate without verifying limits meet contract requirements ✅ Right: Compare certificate limits against contract insurance clause before approval ### Mistake #5: Not Tracking Multiple Certificates ❌ Wrong: Managing hundreds of COIs in email folders or paper files ✅ Right: Use automated COI tracking software to monitor expirations and compliance ### Mistake #6: Overlooking Waivers of Subrogation ❌ Wrong: Not checking if waiver of subrogation is required by contract ✅ Right: Verify waiver is shown on certificate and actual endorsement exists on policy

How CoverLedger Simplifies ACORD 25 and ACORD 27 Management

Tracking dozens or hundreds of ACORD 25 vs ACORD 27 certificates manually is time-consuming and error-prone. CoverLedger's AI-powered platform automates the entire process: Automated Extraction - Upload or email certificates → AI extracts all policy details in under 2 minutes - Automatically identifies whether certificate is ACORD 25, ACORD 27, or other form type - Captures coverage limits, dates, endorsements, and certificate holder information Compliance Verification - Set insurance requirements per contract (coverage types, limits, endorsements) - CoverLedger flags non-compliant certificates before approval - Alerts you if additional insured or waiver of subrogation is missing Expiration Tracking - Automatic email alerts at 60, 30, and 15 days before policy expiration - Tracks renewals and updates automatically - Dashboard shows all expiring certificates at a glance Centralized Storage - All ACORD 25 and ACORD 27 certificates in one secure location - Search by vendor, policy type, coverage, or expiration date - Export compliance reports for audits or management review Email Integration - Vendors email certificates directly to your CoverLedger inbox - AI processes incoming certificates automatically - No more manual downloads, filing, or data entry ---

Frequently Asked Questions

Conclusion

Understanding ACORD 25 vs ACORD 27 is essential for protecting your business from liability and property risks. ACORD 25 proves liability insurance coverage (protecting against injuries and damage to others), while ACORD 27 proves property insurance coverage (protecting physical buildings and contents). Most business relationships require ACORD 25, while commercial leases, lending, and property-related transactions often need ACORD 27—or both. The key to effective insurance verification is knowing which form to request for each situation, verifying the information is accurate and current, and tracking expirations to ensure continuous coverage. As your business grows and the number of certificates you manage increases, automated COI tracking becomes essential for compliance and risk management. Ready to streamline your ACORD 25 and ACORD 27 tracking? CoverLedger's AI-powered platform automatically extracts, verifies, and tracks all your certificates of insurance, reducing management time by 90% while eliminating coverage gaps. Start your free 14-day trial today or schedule a demo to see how automated COI tracking protects your business. ---

Internal Links

- What is a Certificate of Insurance (COI)? - Complete COI definition - Complete ACORD 25 Form Breakdown - Section-by-section guide - Why Certificates of Insurance Are Required - Essential business guide - How to Automate COI Tracking - Step-by-step automation - COI Compliance Checklist - Ensure proper coverage ---