Are you leaving yourself open to liability if a customer does not sign off on the offer of credit insurance on a note even if it is checked "no"?

Yes. I know of 5 court cases where a bank lost because this section was not marked. In each situation, the consumer argued that they thought they had insurance. The bank had no way to prove they declined the insurance. Sad. We always recommend that loan officers have the consumer sign they do or do not want the insurance. CYA.