Posted by Robert Phelan on Tue, Dec 22, 2009 @ 09:03 AM
The job of an insurance agent/broker is to sell insurance policies on behalf of the insurance companies they represent. Even worse, 95% of them are generalists who are only partially dedicated to the construction industry. This means that if you are relying on them to help you with COI administration, don't hold your breath.
A specialized Risk Advisor, dedicated to the construction industry is a different animal. They are a pro-active service provider who understands COI administration in minute detail. If you were to engage one of them, this is the process they would help you implement:
• If you are an upstream party, they would work with you and your legal counsel to be sure you've transferred downstream as much risk as possible
• They would also help you keep your contract current with legal developments in your jurisdiction as well as insurance coverage enhancements and changes
• If you are a downstream party, they would either read or train someone on your staff to read the insurance specifications on every job you bid, and advise what to agree to as well as push-back on
• They would make sure that the coverage you have is adequate to comply with the types of contracts you are signing
If you are an upstream party, they would provide you with the "Perfect COI". This would be a sample COI you provide to all subcontractors and sub-subs to show them exactly how you want the COI to read along with any attachments required (additional insured endorsements, waiver of subrogation, copy of specialty coverage policy, etc.)
Lastly, they would teach someone at your construction firm the process of checking every Certificate of Insurance for as long as the downstream party is obligated to you. This is the final element without which all the others are meaningless. It is also the fourth and final "C" in the C4 process and the subject of my next post.