When using contractors, subcontractors, vendors, and other third parties to provide you with services, as a business owner it’s critical that you enter into a formal contact with insurance requirements that mandate that your entity is included as an Additional Insured on a primary and non-contributory basis with a waiver of subrogation. Hold harmless and Indemnity provisions are also important. This will provide you with protection against potential liability claims these individuals may cause.
For example, you may contract with a landscaping service to take care of your premises on a weekly basis, use an electrician to upgrade your building’s wiring, or hire a general contractor to remodel your offices. In any of these cases, if there is an accident that results in third-party property damage or physical injuries, you want to ensure that your vendors and contractors are properly insured to address their responsibilities and obligations and that their policy will provide you with protection from any such claim.
For proof of insurance, ask all contractors for a Certificate of Insurance (COI). A COI includes the named insured, coverage types, issuing insurance company, policy number, policy limits and deductibles, and effective dates. When working with general contractors and artisan contractors (plumbers, tree trimmers, HVAC subcontractors, etc.), request a COI for both General Liability, Auto, Excess Liability and Workers’ Compensation insurance before the work begins. You want to ensure that they have insurance to cover third-party bodily injuries and property damage as well as injuries to their employees while on the job at your location. If not, you could end up responsible for their acts. Don’t assume that a contractor or subcontractor is covered or accept confirmation without proof of insurance.
Having a certificate of insurance is a powerful step in mitigating the exposure to third-party claims. Owens Group specializes in providing businesses with comprehensive commercial lines insurance solutions as well as risk management services to help reduce the potential for claims, including reviewing the insurance provisions in your contractual agreements with your vendors and contractors. For more information about our solutions, please contact Jean Dennehy at 201-408-3506.