You may have been in the business 20+ years but so have I (1983). Actually I believe you have been in the business for 30+ years because back in 2009 you were giving 25+ years in the business....so you are seasoned.
The issue with AI can be argued on many different points, the court dockets are clogged with AI suits.
I will stand by what I said about the AI on the BAP, it gives you nothing that the BAP "who is" definition doesn't already do. You don't care to believe me fine....go to International Risk Managment, Inc. and fight with heir lawyers about it. Guess what ---- attorney's will always name you.
The WC WOS will not stop someone from suing you. Don't believe me --- fine go argue with the attorneys. There is a reason that the States are moving in and making it illegal to have the WC WOS. I'll help you --- The Albert Risk Management Consultants claims management team (Glenn Brown, Lisa Hartman, William Quinn, Jr., David Ackerman, and David A. Tweedy) contributes articles on claims topics. You can reach Glenn Brown at email@example.com
"In the scenario where the employee initiates the third-party claim, and there is a waiver of subrogation endorsement attached to the workers compensation policy, the contractor who required the waiver receives absolutely no benefit from the waiver. The claim is not barred because the injured employee who initiated the claim is not bound by the waiver. The third-party award does not get reduced even though the workers compensation insurer has waived their right to recover its payments from the award. In many jurisdictions, when there is a waiver, the injured employee gets to keep the full award which essentially gives the employee a double recovery for the indemnity and medical benefits already received through the workers compensation claim. Giving a double recovery to an injured employee while providing no benefit to the contractor that included the waiver of subrogation in its contract was certainly not the intent of requiring the waiver, but in many cases, it is the reality.
While the preceding paragraphs highlight some states where subcontractors aren't required to forego a third-party recovery even when there is a waiver of subrogation in place, these states are very much in the minority. It is a cruel irony for subcontractors that they are forced to accept waivers of subrogation to secure work from general contractors, and, yet, the waiver may not benefit the general contractor but could cause great harm to the subcontractor's loss experience. Until universal change comes to the industry, subcontractors can only push back on waivers where they can and, of course, work as safely as possible to avoid the multiple claim hits that can come from injuries to their employees."
Did you even read what the City of Atlanta decided to do with the 30 day notice of cancellation endorsement? It is a waste of your time and the insurance company time. Put it in the contract and then if the subcontractor fails to give you notice...it is a breech. As I preach to my clients --- "you ain't covered for breech, why did you sign that contract."
From Zurich Insurance
Senior Vice President of Operations
and Profit Management
Seth is an active member of the Associated General Contractors of America (AGC), a board member of the ACE Mentor Program as well as the construction issues committee of the American Insurance Association (AIA). He holds a Construction Risk and Insurance Specialist (CRIS) designation from the Insurance Institute of America.
A deeper look at the cancellation scenarios
As construction insurers looked at the specific contract terms, it became clear the solution would not be as simple as a short endorsement designed to meet the various contract terms. A key issue was the different scenarios under which policy
Active cancellation by the insurance company.
This is perhaps the least common scenario, but the easiest to manage. Various reasons could include misrepresentation or significant change in operations. The insurance company is typically required to
provide advanced notice to the contractor and that notice could easily be provided to certificate holders as well.
Non-payment of premium.
This is often the most common scenario as well as the most challenging to manage. Premium payments are typically made monthly. If an insured misses a payment, the insurance company often provides advance notice
that coverage would be cancelled within 10 days. While it is reasonable to provide this notice to interested third parties, in many cases, the premium is paid prior to the actual cancellation date and therefore the cancellation is rescinded. This scenario presents two challenges. First, the insurance company is required to provide a second notice to third parties indicating coverage was not cancelled. This process creates more work and is inefficient and costly. Secondly, and perhaps more importantly, every time a payment was late or lost in the mail, the insurance company would have to provide notice to all third parties that cancellation would occur. This would cause unnecessary challenges for subcontractors since the premium payments are generally paid and coverage is typically not cancelled.
A contractor can request immediate cancellation from their insurance company. This occurs if the contractor decides mid-term to change carriers or has other business circumstances that warrant cancellation. While these are exactly the scenarios that owners want to be made aware of, it is contractually impossible for an insurance company to provide advance notice of these changes.
The only possible notification could occur subsequent to the cancellation."
There are more to the above examples. Maybe you've been out of the retail side for a while it has become more normal for underwriters to not request a copy of the COI.
"Who is in the best position to send the notice? Most owners expect the notice to come from a third party which makes sense as the subcontractor who has a genuine cancellation issue is not as likely to volunteer that information. Most contracts require notice to come from the insurance company; however, the insurance companies do not have record of the third parties under contract and/or certificate holders. This information is retained by the insurance broker. While the broker could transmit that information to the insurance company, the potential for error increases. So perhaps the broker is in the best position to provide notice of cancellation; however, most contracts do not provide that flexibility. The same is true for independent vendors with the infrastructure to provide notice in a timely and accurate fashion. The insurance company will simply notify one party via policy terms and the contractor’s agreement allows for independent third party notification.
While this appears to be an efficient process, many of today’s contracts do not allow for that option."
This is from the Big I Virtual University about the days of the old Acord Form ----
"The ACORD certificates of insurance indicate that the issuing insurer will "endeavor to" provide notice of cancellation to the certificate holder. Typically, nothing in the policy requires this and many of your insurers say they do not even want copies of certificates, much less plan to provide notice.
Is telling the certificate holder that the insurer with "endeavor to" provide notice of cancellation (when they clearly have no intention of doing so) ethical?
At least one state insurance department (New York, February 15, 2006) has moved this issue from the realm of ethical dilemmas to that of regulatory decree by opining that, if a policy (presumably including additional insured endorsements) does not grant a right to notice of cancellation, then the ACORD certificate should not include such a grant."
"As an agent/broker I have been dealing with this issue for 40 years. As a student of the business and instructor for the IEA, I have been teaching and discussing this issue with 1000's of insurance professionals over the last 30 years. I have many clients that are certificate holders and certificate givers. I tell all of them that they MUST not rely on a certificate for any grant of coverage or privilege under the policy.
The term "endeavor to" is so ambiguous and subjective that it can not be relied upon for any certainty of action. I could endeavor to give you a $1,000,000 but that does not mean you will get it. Endeavor can be no more than a wish or a prayer.
Barring any direct promise to do so, I do not believe that failing to notify a certificate holder of cancellation or change is a breach of of the standard of care. Unless you specifically obligate yourself to that certificate holder, there is no obligation to physically notify them.
I have been involved in several law suits regarding this issue as an expert and it has become very clear that the standard of the industry is generally not to provide specific notification. While something may be legal and not ethical, I believe that the standard applying to the millions of certificates that are issued are pretty clear."
On the 30 day notification you fail to take into account that there are times an insurance company CAN NOT supply the 30 day notice. Having once worked for the insurance company you surely know this fact.
So if you really, really, really want a notice stop relying on a third party and put it in your contractors contracts. They are the ones that will pay the price for not giving you notice, they are the one's that have a duty and that is all I have to say about it.
Now there is a reason I give you notations from places like International Risk Management, insurance companies and the Big I and that is this --- I can say anything but if I don't back them up, they are just words.
Just because people think they are getting something doesn't mean in reality they will benefit from their belief.
Every COI I send I also send this notice --
Property and Casualty Insurance Companies and Producers Issuing Certificates of Insurance in
Pennsylvania; Notice No. 2009-02 [39 Pa.B. 918]
[Saturday, February 14, 2009]
''Certificates of Insurance'' regarding Property and Casualty coverage are typically used to
provide proof of liability insurance to and summarize the terms of a policy for a third party in lieu of
providing the third party with a complete copy of the policy.
Certificates of insurance are not forms subject to filing with the Insurance Department (Department)
because these certificates do not in any context amend, extend or alter coverage of the insurance
policy. They simply summarize the coverages provided by that policy.
This is also added to the COI package --
http://www.docstoc.com/docs/165267786/T ... cers-doing
I added the above to make certificate holders aware that just because another broker says they have AI status on a Cert --- it may not be true. There are / were a lot of brokers that would send out a COI giving AI status before it was a manuscript on the policy. For a long time I've promoted using the Broad Form AI and that way nobody misses asking for the endorsement.
Even though it may only be $50 to add the 30 day notice endorsement it is still a cost. It is a cost to the project owner, the contractor, the subcontractor, the insurance company and to me, the person that needs to obtain the endorsement.
I still remember a time that big General Contractors would accept one COI that was written for "all jobs". As one underwriter said --- "the requests keep getting worse and worse."
The word surrender may have been used to mean, you are giving your policy back to the insurance company. When I've had insureds request cancellation the insurance company will want the policy back (surrendering it). Normally I have to complete an LPR and that settles that one. Parsing words are we?
"Oh...one more thing - the only policy that I know of that an insured can "surrender" is a cash value life insurance policy "
Late in the east and time for a glass of vino.
Big Dog wrote:I’ll try and address a few of your points, since your response was all over the map, and your train of thought had no caboose..
Having worked in the insurance industry for some 20+ years before working on the “client side”, most insurance carriers have the technology to track who is named as an Additional Insured, or requires a Waiver of Subrogation on a policy. If a vendor/contractor/service provider were to cancel their coverage immediately upon renewal, and we did not receive not any notice of that, they would be in Breach of Agreement – which has severe legal implications.
With respects to being named as an Additional Insured on a BAP, in my situation, we have numerous vendors/contractors/service providers on site every day. If one of them runs into someone or damages someone’s vehicle on our owned/leased property, the injured party’s attorney is going to name everyone and their mother in a legal action. Since we were not the ones that caused the accident, we’ll look to those vendors etc. to cover our defense costs with the AI.
The same holds true for a Waiver of Subrogation on Workers’ Comp. Considering we have some 100+ vendors/contractors/service providers on site at each of our facilities on any given day, I don’t want to be responsible if they are injured (we pay enough in claims as is).
I’ve had several insurance brokerages tell their clients not to agree to Additional Insured or Waiver of Subrogation requirements in an Agreement, and to tell us that the carrier won’t allow it. Nine times out of ten their coverage is with an insurance carrier that’s part of our overall insurance program, and we’re aware of what they can and can’t do.
Oh...one more thing - the only policy that I know of that an insured can "surrender" is a cash value life insurance policy (something we don't contractually require).