A member recently sent me the insurance requirements from one of his client's contracts. The contract was for a construction project for a municipal government. Among other things, it stated:
A signed attached endorsement on the agents/brokers letterhead must accompany the certificate and list the policy number and each of the (requirements previously stated), and the following statement must proceed the listing: "This certificate warrants that:"
The previously stated requirements included things like endorsements to cover the contract's indemnification agreements, additional insured endorsements, customized waiver of subrogation wording, endorsements to make the contractor's policies primary, and the "per project" aggregate endorsement. My first thought upon reading this was that few, if any, insurance companies will be willing to meet these requirements. Some, such as the required endorsements to make the contractor's coverage primary, are redundant and unnecessary. Others are just unreasonable and outside standard industry practice. My second thought was that an agent should not be warranting anything to a certificate holder unless she really wants to take her E&O policy out for a test drive.
All of this sent me again to an excellent resource, one you should all become acquainted with if you haven't already. Big I Virtual University has a Certificates of Insurance Resource Section on its Web site. Among the helpful documents you'll find there are:
- The Big "I"'s policy statement on certificates
- An article on certificates for agents to share with their clients
- VU's white paper on certificates
- A "best practices" document created by the Texas Big "I"
- Summaries of relevant court cases
- A podcast
There are several other helpful links on the page as well. Most of the links are accessible to non-members, but IIABNY members can access all of them by entering their IIABNY Web site user ID and password. I highly encourage you to check these materials, so you'll have good information to help you deal with contract requirements like these.
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