Help protect your business against potentially costly liability claims.
1. Obtain Certificates of Insurance.
These should come from the contractor's insurance company or agent. Do not accept a photocopy.
2. Ensure valid insurance coverage.
Establish a process to make certain all new certificates are received at renewal and that coverage stays in place throughout the contractors' policy year.
3. Verify expiration date.
The job must fall within the effective and expiration dates on the certificate. If the job should extend beyond, request a new certificate.
4. Confirm adequate insurance limits.
Adequate limits may vary depending on the risk associated with the task involved. Consult with your agent to establish appropriate limitation requirements. A good rule of thumb is to require limits equal to or greater than what you carry.
5. Create a file for certificates.
Keep the file readily accessible. When your carrier conducts an audit, have the certificates available.
6. Request additional insured status.
Ensure that the contractor lists you - and your real estate manager, if different - as an additional insured on a primary basis for both ongoing and completed operations. Require a minimum limit of insurance for all policies to meet your needs, and obtain a copy of the additional insured endorsement.
7. Require a hold-harmless clause in your agreement.
In the clause, include an obligation to defend or indemnify you for defense costs and losses due to injury or damage. Some states place limitations or prohibitions on indemnity provisions. Review contracts periodically with your lawyer to ensure they comply with the current state of the law.