By Carter McAuley, Brokerage Service Manager
A common situation that comes up mid-policy term (particularly in the spring and summer months) is when the insured is awarded a new contract. This can present a new challenge for the insured and agent. Many times the new contract comes with a complex list of new insurance requirements. It is important to carefully review the policy and endorsements to make sure the insured meets these conditions. Below are some of the most common requests and how they can be addressed.
Often a project will require higher limits, particularly if working for a larger general contractor or a municipality. There are several ways the insured can address this.
a. Increase the policy limits. This increases the limits of the policy for all projects, not just the new contract. When a new contract is awarded, it is a good time to address an insured’s limits overall. Growing companies often need higher limits simply to ensure that they are adequately covered.
b. Project specific limits. This option adds an endorsement to the policy specifically increasing the limits for just the new contract. This option requires a copy of the contract, the name of the project, scope of work and duration, as well as the projected revenues from the project.
c. Project specific policy. This option involves writing a new policy specifically for the project. Usually this happens when there are very high limits being requested or the carrier is unable to endorse a project specific limit onto the practice policy. A carrier will also add an exclusion to the practice policy for the project in question to avoid duplicate coverage.
Project owners or general contractors will usually require that they be listed on an insured’s policy as an additional insured for ongoing and completed operations. Many times, package policies will include a blanket endorsement(s) for this. However, sometimes larger contractors or companies will require being specifically listed or require a specific form. This can usually be accommodated by the carrier for an additional premium.
Another special situation is when a subcontractor is required to list the project owner as an additional insured. Additional insured endorsements are generally written with a stipulation that a written contract exists between the two parties. However, no written contract will exist between a project owner and subcontractors. An endorsement can be issued to address this gap. Other typical requirements include Waiver of Subrogation, Primary and Non-Contributory Wording, and 30 Day Notice of Cancellation.
Once your insured has been awarded a contract, it’s important that part of the preparation for the job includes a review of the current coverage in place, as well as the limits. Not only do insurance requirements typically need to be met in order to move forward with the job, the right coverage will give the insured piece of mind in the event of a claim.
For more information on the environmental insurance products Beacon Hill Associates can access, contact us.