One of the biggest exposures for an errors and omissions claims arises from certificates of insurance. When providing additional insurance, under the commercial general liability policy replace the need for a waiver of subrogation endorsement? Read this article to find out.
Certificates of Insurance
Recent settlements and jury verdicts against property owners and managers hit with premises liability claims continue to climb. Whether your clients own a tavern, a manufacturing plant, manage apartment complexes, or are homeowners, their current liability limits may be insufficient in today’s legal environment.
Do agents owe any duty to a certificate holder? Opinions differ. Given the reality of the COI, its intended purpose and the parties to the various contracts related to a construction site, agents have very little duty to the certificate holder beyond honesty.
Warren Buffett introduced the newest insurance disrupter – the THREE. As the name suggests, this is a three-page insurance policy intended for small businesses. If that isn’t amazing enough, this policy combines seven different coverages into its three pages. So, what is the problem? Well, there are many problems that will victimize an unsuspecting insured.
Contractual risk transfer is often confused with insurance coverage; and certificates of insurance are ALWAYS confused for a document with any real meaning or power. This article focuses on one key fact – the insurance policy rules regardless what the contract says.
Contractual risk transfer is a fact of life for any agent working with construction clients. Your client might be the transferor or the transferee or both on the same job. Because insurance is a slave to the contract, you have to understand contractual risk transfer.
An insured who is leasing a building or space in a building is being required by the landlord to carry $1M in “fire legal” coverage. The insured’s CGL insurer will not provide more than $300K in FDLL limits. What can the insured do? Better, what SHOULD the insured do?
Agent question: “We have not been individually adding Additional Insured endorsements, relying on them being an indemnitee in the ‘insured contract’ wording of the CGL or BOP policies, which gives them AI status without endorsing that on the policy.” Could this agency have a problem, along with their customers?
Many, if not most, certificates of insurance identify one or more parties as additional insureds. However, with several hundred non-ISO AI endorsements in the marketplace, many of these forms provide significantly inferior AI coverage compared to ISO forms. So, just checking an AI box on the COI doesn’t tell anyone much of anything. So, should…
