Before signing any contract, we strongly recommend having a lawyer review the contract on your behalf as well as utilizing your Hausmann-Johnson service team to review the insurance portion. We are here to review the insurance requirements in your contracts and inform you of items that we feel could be detrimental to your work. We will also help to identify requirements that you should be negotiated out of the contract, any hidden charges within the contract, and any insurance requirements that are not insurable.
Requirements to be Negotiated
Items such as workers compensation waivers are a standard contract request. However, if a general contractor or owner does require this, it is in your best interest to negotiate this requirement out of the contract. If an insurance carrier cannot subrogate to recover some of the money lost from a claim, even if the injury was not your fault, your experience modification may be negatively affected. Many times, general contractors and owners are simply following the advice of the engineer or architect on the project, but you can still negotiate to get some changes made to your benefit.
Hidden Charges
We will help you identify requirements that will be extra charges so that they can be built into your bids. We do not want you to be caught off guard when applying for final payment and you find you cannot be paid because of not meeting all the insurance requirements. We all want to avoid the situation where additional costs are discovered after the contract has been signed. This can lead to a small job going from a profit to a loss. This is why we strongly encourage all of our clients to have us review contracts before they are signed. Once contracts are signed, you have now agreed to the requirements and quite possibly have lost your negotiation capabilities.
Uninsured Requirements
We also encourage you to have us take a look at the contract as some of the insurance requirements may not be insurable. We don’t want you to be found in breach of contract. Come claim time, if something in the contract is required to be covered by your policy and your insurance policy does not cover the exposure, your company may be forced to pay out of pocket. One of these examples is if a general contractor or owner requires you to have a specific additional insured endorsement. Some of these endorsements require sole negligence of the general contractor or owner to be covered by your insurance policy. Some additional insured endorsements do not cover sole negligence of the general contractor or owner. Also, workers compensation waivers can be either blanketed or per project, but they cannot be both. Some general contractors and owners require a blanket waiver to be indicated on the certificate of insurance. This is not always possible if your policy has a per project workers compensation waiver.
We can help!
Your dedicated insurance team is here to help you. While insurance may not be your top priority, it is always ours. We are here to answer your questions and help educate you regarding your insurance policies. We will help you understand the risk transfer situation you may be in and guide you through the process.
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