Thursday, April 30, 2009

Service & Sub Contractor Insurance Guide

Service & Sub Contractors present a significant loss exposure to your business. Potential losses may come from injuries to their employees or injuries or damage to others as a result of their work.

I recommend that you take these steps to protect yourself against this exposure:

1. Require all service contractors to provide a Certificate of Insurance showing that they carry at least General Liability & Workers' Compensation coverage. Effective dates should be current, and policy limits should be at least as high as the limits on your own policies.

2. Require them to name you as Additional Insured on their General Liability policy. If you are an Additional Insured on their policy, then their insurance carrier will be obligated to defend and pay claims on behalf of both of you.

3. Be an Additional Insured for both Current & Completed Operations on their General Liability policy. Many forms will add you as an additional insured for a contractor's current operations, but they will exclude coverage for completed operations. This could create a large gap in coverage for you (on the contractor's policy), if a suit is brought alleging damage caused after they left their jobsite. A "current operation" exists while the contractor is working on the site. A "completed operation" exists after the job is completed.

4. Require Waiver of Subrogation endorsement on the General Liability & Workers' Compensation policies. If a contractor's insurance company has to pay out money on your behalf, they may try to go against you to be reimbursed. This is called subrogation. A Waiver of Subrogation means that they cannot come after you for reimbursement.

5. Require Primary, Non-contributory wording on their General Liability policy. This wording means that the contractor's insurance policy will respond first in any claim that involves the two of you.

6. Require Workers' Compensation insurance regardless of your state's requirements. All states have their own Workers' Compensation statutes. Virginia, for example, requires Work Comp insurance for companies of 3 employees or more (full or part-time). If an employee is injured on the job, then they are entitled to medical & disability payments from their employer. In our situation, your contractor may not carry Work Comp insurance. If one of their employees is injured while working on your property, then that employee may bring suit against you for his/her injuries. If you require your contractors to carry Work Comp insurance, then that policy will cover those expenses.

This is a checklist of items that I share with my insurance clients. If you have any questions, or suggestions to improve this list, please send me a note.

Tuesday, April 28, 2009

The Growing Trend of Uninsured Drivers

As referenced in my first post below (4/8/09), the number of uninsured drivers on the road is growing. I received an article from The Hartford Insurance Group's HartfordHelp website that attests to this fact.

Uninsured Drivers Hit the Roads in Record Numbers
A recent auto insurance industry study reports a drastic rise in the number of drivers who are dropping their auto insurance and driving on the roads uninsured...

Keep an eye on your Uninsured/Underinsured Motorists Liability limits. Protect yourself against those who don't.

Saturday, April 25, 2009

Flood Insurance Facts

The following information is summarized & excerpted from the National Flood Insurance Program's website. For more information, please visit:

Flooding is the most common natural disaster. Flash floods, inland flooding and seasonal storms are always possible and can bring floods to every part of the region. Just one inch of water can cause thousands of dollars in damage. Most homeowners insurance does not cover floods. Only flood insurance financially protects your home and your personal property from floods.

Flood insurance compensates policyholders for all covered losses, and as opposed to a disaster loan, there is no payback requirement. The average flood insurance premium is approximately $500 a year. As long as your community participates in the NFIP, you can purchase flood insurance regardless of the extent of your flood risk. You are eligible for flood insurance if your house has been flooded before, and you can purchase it even if your mortgage doesn't require it.

In 2007, nearly 25 percent of all flood insurance claims came from low- to moderate-risk areas. You may be eligible for low cost Preferred Risk Policy if you live in a low- or moderate-risk area.

For just $119 a year, you can purchase a minimum of $20,000 building and $8,000 contents coverage. Business owners can purchase $50,000 building coverage and $50,000 contents coverage (per building) for just $550 per year.

Should a flood event occur in your community, it is important you know what to do in response to a flood watch or warning, as well as the important steps to take when you return home. Below, please find links to documents to assist you as you recover from flood damage:

After The Flood Fact Sheet
Tips on how to safely assess the extent of flood damage to your property, as well as instructions on how to prevent further loss.

Filing Your Flood Claim
A checklist for policyholders as they manage their claim.

NFIP Summary of Coverages
An explanation to help policyholders understand the extent of coverages provided by their Flood policy.

The above information was excerpted from the National Flood Insurance Program's website. For more information on Floods and Flood coverage, please visit

Wednesday, April 22, 2009


I am a licensed Property & Casualty Insurance Agent and Consultant, and my blog is about general insurance & risk management concepts. Every company is different; every policy is different; every state is different. I try to give the most updated facts, based on my research and 12 years of experience in the industry. However, before you act on your policy, be sure to verify with your company and your state's insurance regulations. If you have a specific question as it relates to your policy, please don't hesitate to contact me -

Wednesday, April 8, 2009

Uninsured & Underinsured Motorists Liability

When the economy is down, people will be tempted to skimp where they can. Some will choose to skimp on their Auto insurance. They may purchase the bare minimum ($25,000 liability limit in VA), or they may choose to go without insurance at all.

You may get hit by an uninsured driver; or you may get hit by a driver with liability limits that are inadequate to cover your damages. When a situation like this happens, look to the Uninsured/Underinsured Motorists Liability portion of your Auto policy.

What's that? Where's that? Look on your declarations page - under your Liability coverages. You will see this:

Bodily Injury Per Person/Bodily Injury Per Occurrence
Property Damage Per Occurrence

Medical Expenses (or PIP) (to be explained in a future post)

Un/Underinsured Motorists Bodily Injury Per Person / Bodily Injury Per Occurrence
Un/Underinsured Motorists Property Damage Per Occurrence

Your UM Liability limits should be the same as your Liability limits. After all, this is insurance that will pay for bodily injury and property damage to YOU and YOUR CAR - if you're hit by an un/underinsured driver. This coverage should also pay for a rental car while your car is being repaired.

I have seen some companies include a $200 deductible for UM coverage. Check your policy to see what your company requires.

If you are hit by an uninsured or an underinsured driver, don't let your insurance carrier pay the claim under your Collision coverage. Make sure that they pay the claim under your UM coverages. You pay the premium for it, make sure they use it.