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Insurance question

Discussion in 'Commercial Snow Removal' started by Plow Nuts, Oct 25, 2011.

  1. Plow Nuts

    Plow Nuts Senior Member
    Messages: 214

    We just bid out a commercial property and was asked to make additions to our insurance so that the property locations would be named as "additional insured" on the insurance certificate. This is the first time we have been asked for this--anyone familiar with it?
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    All the time,you should see my policy!
  3. Plow Nuts

    Plow Nuts Senior Member
    Messages: 214

    Thanks . It is nice to have a seasoned veteran provide then answer. :salute:
  4. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    When do you need to have someone
    name you as additional insured?

    A general liability policy only provides defense coverage for the named insured, which
    means the corporation, LLC, officers, members, employees or volunteers. If you
    find yourself with sub contractors coming into your business or activity you need
    to request insurance coverage from them with limits of at least $1,000,000 per
    occurrence and name you as additional insured. I would recommend that you do
    this for their general liability, commercial auto and workers compensation.

    The definition of an additional insured is:

    An individual or entity that is not automatically included as an insured under the policy
    of another, but for whom the named insured's policy provides a certain degree of
    protection. An endorsement is typically required to effect additional insured status.

    Why would you want to request to be named additional insured on all three
    policies general liability, commercial auto and workers compensation?
    If the sub contractor comes onto your property to do work for you or to show at an exhibit
    they would usually be driving. If they have a personal auto policy there is exclusions in all personal auto policies for business pursuits. What that means is that they might have no coverage while operating their business under their personal auto policy. Their personal
    auto insurance company will not usually name someone as additional insured as
    that is an unusual request for a personal auto policy. A red light should come on
    when you can not get a certificate of insurance for their auto coverage!!!

    Example: driving on your property the sub contractor runs over one of your customers. It is not your fault, you did not do it, but a lawsuit
    is filed against the sub contractor and your company. You have defense costs that might not covered under your policy as it
    was not an act committed by you. If you are named as additional insured under the sub contractors commercial
    auto policy you would have defense coverage for acts that they did.

    If the sub contractor comes onto your property either to do work for you or show at an exhibit and sets up their tent and puts a stake
    into the ground and knocks out the electricity or water, your policy would not necessarily provide coverage for the repairs.

    Example: Let’s say they put up a display; the display falls on someone that is attending the event injuring that person. Your policy might
    not cover this injury as it was not your act that injured the party. You would be named in a lawsuit and would have defense costs that
    might not be covered. If you are named as an additional insured under the sub contractors’ general liability policy you would
    have defense coverage for their acts.

    If the sub contractor comes onto your property or to show at an exhibit they might have employees working for them. The sub contractor
    might not have work comp as they think that if they call them sub contractors that they can get away with it. That is a wrong
    approach and will bite them in the butt later but for this article we say that that have no workers compensation insurance.
    Since you hired them or allowed them to show up without workers compensation insurance you might be ultimately
    responsible for their employees injuries.

    Example: You have an event where sub contractors come to set up a stage. One of the employees of the sub contractor gets injured,
    but the sub contractor does not have work comp. Since it was on your property and you hired the sub contractor, you can be held
    responsible for thatemployee’s medical bills, loss of income etc. Also when you go through your annual audit and do not provide proof of
    certificates of insurance you can be charged for that payroll even though you did not hire them. All because you did not require the correct paperwork BEFORE you allowed them on your property, business, or event.

    The lesson here is to request certificates of insurance from all subcontractors or exhibitors for all three coverages in order to better protect your
    interests. Not doing so could cost you tens of thousands of dollars in defense costs or possibly losing a lawsuit that takes your company to
    bankruptcy! Work with your insurance agent to request the correct insurance from sub contractors and to make sure that you have the
    correct insurance in place to protect your assets.

    SNOWLORD Senior Member
    from MN
    Messages: 610

    I agree with grandview, We have dozens of additional insureds on our policy if your gonna be in this biz you will have alot of them no big deal.

  6. Plow Nuts

    Plow Nuts Senior Member
    Messages: 214

    we have had the business and insurance in place for years but this is the first time we have been asked to be named additional insured on the policy--LOL--guess the prior customers should have done their due diligence.
  7. sectlandscaping

    sectlandscaping Senior Member
    Messages: 315

    all commercial accounts ask for COI's.
  8. tjlands

    tjlands Senior Member
    Messages: 579

    We also have many additional insured clients, just new this year our insurance company is charging from $50- $300 each depending on estimated Revenue.

    question for all- Why shouldnt we as the service provider be listed as additional insured on a management/ national co. etc. policy if they are getting the calls.
    Case in point- What if "sally" in the "call center" gets a call about a dangerous situation, say at 5pm and doesn't call the contractor until the next morning.
    Then somebody falls and gets badly hurt overnight- who should be responsible,
    that's right Sally and the call center, not the poor snow plow company that will undoubtedly get sued.
  9. mullis56

    mullis56 Senior Member
    from Indiana
    Messages: 824

    Get unlimited additional insured requests on your policy we did it 2 years ago we have 100's of these our agency has to make for us all of the time.
  10. mpgall26

    mpgall26 Senior Member
    Messages: 228

    Perfect thread, didn't see this at first. I planned on having a condo assoc. named on GL and then they just told me they want workers comp proof also. I'm not sure how to approach this before next week when we planned on signing. I didn't plan for comp since i was gonna do this property myself and maybe some "sidewalk crew" as a "sub" as needed.
  11. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    If your solo,you don't need workmen comp
  12. tjlands

    tjlands Senior Member
    Messages: 579

    You do if you live in NJ and service commercial properties.
  13. NickT

    NickT Senior Member
    Messages: 707

    Lots of good info here.
  14. mpgall26

    mpgall26 Senior Member
    Messages: 228

    Getting killed on bidding and estimating forum for no comp. LOL I was doing this myself with 1 truck and was just gonna have some "under the table" guys for sidewalk crew as needed, not to cool I guess. Scrambling with ins company for a quick "as is" comp. I thought I was done with LLC, GL, vehicle ins. etc.
  15. hoskm01

    hoskm01 Senior Member
    from AZ
    Messages: 475

    You're asking for trouble from the tax (men), your customers and the labor board.
  16. mpgall26

    mpgall26 Senior Member
    Messages: 228

    I have been scrambling to add comp "as is" policy. Finally found a decent up front rate with end of the year audit. Probably going to be small income compared to you guys, so should be easy enough. Now if the "neighbors kid" cracks his head he can be covered. Must be generational, I cracked my head all the time working under the table as a kid and toughed it out. Probably doing most of it myself anyway.
  17. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Now just hope they are over 18.
  18. mpgall26

    mpgall26 Senior Member
    Messages: 228

    LOL Grandview, you warned me how tough the startup was. Hopefully I can tread through it as I go.
  19. TCLA

    TCLA 2000 Club Member
    Messages: 2,707

    Another benefit for being additionally insured is that you will be notified from the carrier if the insured (sub) doesn't pay his premium or cancels his policy.
  20. Landcare - Mont

    Landcare - Mont Senior Member
    Messages: 351

    Our broker is reluctant to add customers as "named insured" on our liability policy. Her explanation is that, once someone is named as insured on your policy, they can make claims against it without you even agreeing that there is a claim. We just went through a long discussion with one of our larger customers, a national property management company which specializes in managing properties for a very large Canadian corporation. They were insisting that they and their client and "all their subsidieries" be named on our policy so that we would be listed as a "compliant" contractor in their files. We finally compromised and added them as named insureds but made the insurance certificate "site specific", i.e. only good for claims on the sites for which we have contracts to clear snow.

    Maybe we're a little too anal but we don't really like giving anyone free rein to make claims on a policy on which we're the only ones paying the premiums, especially when they didn't require this for the first two years of the 3-year contract and we haven't caused any damages in those two years.