In order to do that, it is important to require  all your contractors, vendors, haulers and related trades, along with their sub-contractors, to purchase and maintain insurance with coverage limits and provisions as shown below. This contract must be written and Contractors & Service Providers (Con./Ser Pro) should  be required to include the following minimum limits.   (Remember - NO handshake deals!)

 

• General Liability $1M/occurrence--  $2M Aggregate

• Work Comp Statutory limits & $500,000 EL limits

• Auto liability $1M combined limit

• Builders Risk - Completed value of new construction project

• Umbrella $1M - $5M Depending on the hazards of the work                                                               (for example, asbestos, lead removal and demolition contractors                                                          should provide much higher limits.)

• All other insurance requirements as appropriate for the situation                                                                (For example, Builders Risk, Pollution, Bonds etc.)

 

Exceptions to these limits may be considered for small service providers performing occasional work that is unlikely to create hazards. However, if the building owner/property manager acts as his own contractor, then he MUST require and monitor compliance with these coverages for all parties performing service on the premises, with special emphasis on the work comp compliance for everyone on the worksite, whether required by statute or not!

 

It is essential to understand that requiring the Con./Ser Pro to purchase insurance coverage is only 1/2 of the solution.  In order for the coverage to protect the intended indemnities (your company, owners, lenders, investors, etc.), there must also be a requirement for this coverage along with the other indemnity requirements in the contracts mentioned above. Otherwise the Con./Ser Pro's insurance carrier will refuse to protect you and the other indemnities.  These Insurance requirements must also be spelled out in all contracts and agreements and the subcontracts for the Con./Ser Pros must reflect the same terms. If you regularly use the same Con./Ser Pros you can specify these in a Master Contract and refer back to it for each job contract.

 

After specifying the proper insurance and requiring it contractually, compliance must be verified by your  review of the signed documents and inspection of the proper certificates submitted by the Con./Ser Pro's broker or agent. Sometimes your own broker can help you with this review, but it is best if the property owner/manager has someone on staff who is trained to perform this function. The information in this guide will help you with this process, especially if your contract reviewer works closely with your insurance broker on a few reviews. For additional assistance, seek the service of an insurance consultant or risk management advisor. 

 

Click on the buttons below to see detailed examples of forms, endorsements and other information that should be used with your service providers. Much of this detail is based on recommendations and forms provided by commercial insurance carriers including (Travelers, Hartford Amerisure, CNA and (ISO) Insurance Services Offices documents. I have also included excerpts from reviewed contracts and other sources. I suggest that you start with the Contract, Certificate and Policy Terms button.