Insurance Contract Requirements- What Are They Really Asking For?
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Staffing Contract Requirements
Before you begin working with a new client, you’ll often be asked to review and sign a contract. This contract will usually contain a list of insurance requirements you’re expected to comply with. Below is a list of the more common insurance requirements seen within a contract.
1. Waiver of Subrogation
Subrogation refers to the right of an insurer to sue a third party that has caused a loss to an insured. The purpose of this is to recover some or all of the money paid to an insured for a loss. When your client requires a waiver of subrogation be added to your insurance policy, they’re asking that the carrier waive any rights to go back and recover money from your client in the event of a loss for which they may be responsible.
Many carriers offer a Blanket Waiver of Subrogation endorsement on the general liability, automobile liability and workers’ compensation policies that provide the coverage to any of your clients requiring it in a written contract. You’re also able to schedule a Waiver of Subrogation for a specified client if necessary.
2. Alternate Employer Endorsement
The Alternate Employer Endorsement is an endorsement specific to the workers’ compensation policy. This endorsement provides an entity scheduled as an alternate employer with primary workers’ compensation coverage. If one of your clients asks for an alternate employer endorsement, they’re asking that they be given primary workers’ compensation coverage for your employees. Many carriers are able to offer a Blanket Alternate Employer endorsement providing the coverage to all of your clients requiring it within a written contract.
3. Additional Insured Endorsement
This is perhaps the most common insurance requirement. Your client faces the risk of third-party lawsuits because of their business relationship with you, and this coverage allows for your client to be covered as an insured under your policy. If one of your employees causes a loss, it’s likely you and your client could be sued. The additional insured endorsement provides protection to your client in this situation. Coverage is often offered on the general liability on a blanket basis to any of your clients requiring the coverage in a written contract.
4. Primary & Non-Contributory Endorsement
A primary policy is the first to respond in the event of a loss. When your client asks that coverage be provided on a primary and non-contributory basis, they’re asking that your insurance coverage respond on a primary basis in the event of a loss, and their insurance will only step in once your policy limits are completely exhausted. That being said, in the event of a loss where your client may be partially at fault, if they’re added as an additional insured on a primary and non-contributory basis, your policy limits will be exhausted before their policy steps in. As with the above, an endorsement can typically be added to provide the coverage to the general liability on a blanket basis for any client requiring the wording in a written contract.
Contact a member of our insurance ‘A’ Team today for assistance in deciphering insurance contract wording, and to make sure your insurance policies meet the specified contract requirements.
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