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Print ArticleThere are several basic insurance principles that can have a positive impact on your bottom line as well as insulating you and your company from catastrophic loss. The larger companies that have their own risk managers and safety departments adhere to these rules and are excellent in passing most of their risk back down to the responsible party.
Why should your insurance pay for a loss that an independent contractor caused while working on your behalf? Are you tired of getting hit for workers’ compensation and liability audits because you do not have the appropriate certificates of insurance from your subcontracted labor? The easy thing is to keep paying and buying insurance; the proper thing to do is continue the flow of risk transfer and pass it back to the responsible party.
Many times you hear: “But we don’t have employees,” “I never needed it before” or “I can’t get it if I am not a corporation.” In response, to quote my 8-year-old daughter, Amanda, “Blah, blah, blah.” I suggest you adopt the very basic, but critical slogan “No cert, no work.” If they can not produce a current certificate of insurance with appropriate limits, not less than $1 million, and proper additional insured status granted to you, then you must decide if you want to assume all of their risk. This practice needs to be done for all jobs, and the certificate should be received before the job begins, not after the claim.
Another area of concern is automobile liability limits. This is coverage that protects you in the event you or an employee hits another vehicle or person and causes bodily injury and/or property damage. To protect yourself and your company, you should carry a $1 million limit and make sure your uninsured/underinsured motorist coverage limit is also at $1 million. This coverage protects you if you are hit by another vehicle and they have no insurance or insufficient amounts. Again, this needs to be done before a claim occurs.
Included with this article is a list of 10 insurance commandments that includes some of the basic must-dos relative to insurance and your safety management. Make sure your broker is aware of the territory you are working and your contracts do not have any of the caveats mentioned. Also, remember, safety starts at the top; LEAD BY EXAMPLE, document and be consistent with your procedures and practices. This will assist in keeping your shop safe and profitable.
About the author: Marc Rosenkrantz CIC, AAI, is president of Schechner Lifson Corporation. More information is available by calling 908-598-7813, or visiting www.saferocks.com.
I. Never assume the other person has coverage.
II. Never accept Limits of Liability less than $1,000,000.
III. Always get documentation before the job begins — Certificate of Insurance, Hold-harmless Agreement, Subcontractor Agreement.
IV. Have your exposure basis reviewed at least two times per year. NO surprise audits.
V. Always have Auto Liability and Uninsured Motorist Liability limits at $1,000,000.
VI. Make sure your Workers’ Compensation policy covers all states where you have employees.
VII. Eliminate co-insurance from your Property Liability.
VIII. Shop safety begins at the top – lead by example.
IX. Be consistent with human resource policies and procedures and document, document, document.
X. Work with solid, respectable and reputable insurance professionals only.
