Certs - when will agents all get on the same page

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etimer
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Certs - when will agents all get on the same page

Post by etimer »

Been fighting a lot lately with the general contractors that my subs have contracted with. One example -

Client has broad form AI that has the normal verbal about Any person that you have agreed by written and signed contract will be an Additional Insured. As recommended by many E&O attorneys we agents are supposed to supply minimal verbiage in the description box. So as the attorneys recommend, I always supply copies from the policy that are pertinent to the signed contract. Today I had an accounting clerk that wouldn't accept the Broad Form AI as a valid AI. I tried to explain how it works but she kept interrupting me and it reached the point that I couldn't talk with her.

She said the Controller is the one that reviews the Certs and I will need to talk with her. I said ok, send me there. No can do, she has to call you on her terms.

They also want to have AI on the auto and I wasn't going to get into those weeds and start talking about the "Who is" part of the BAP. Imagine trying to explain " Indemnitees of the BAP named insured are virtually always going to be entities that are legally liable for the named insured’s conduct, and persons exposed to such vicarious liability are automatically
insureds under the BAP, regardless of whether an indemnity relationship with the BAP named insured exists."

I could have explained that she might see some COI that have an endorsement that some companies created -
while not providing any coverage that the “Who Is an Insured” clause did not already provide but are provided to make people feel good.

Talking with my friend at the local big agency, she said that they just had an E&O seminar and were told to place minimal information on those Certs. She said that is good but in the real world clients request more info and cert holders demand more info and will hold back payments.

If we started to following what the E&O people tell us, the attorneys tell us and stop falling for the demands to write what others want --- it would go a long way in stopping the nonsense. Everyone else seems to be able to decide to not step into a liability situation except agents that create certs. We are expected to just accept the liability and keep quiet.
JohnnyLaw
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Re: Certs - when will agents all get on the same page

Post by JohnnyLaw »

GC's holding back monthly draws because of wording on a COI is a old standby. This gives them more float. Puts the agent in a very precarious situation as the client is not getting paid their monthly payment due to your COI. Again your client should look into joining the local chapter of the ASA. At the monthly dinner meeting they have a situation called BI or Business Information. The contractors in the chapter write down on cards name of GC and their issue such as this you are having and other subs share their experience and you exchange good information. If this GC was written down and question was just "Preparing to submit bid has anyone worked for them and have comments on pay practices", they would have learned a wealth of information.
etimer
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Re: Certs - when will agents all get on the same page

Post by etimer »

I agree 100% that it is a way to float the money before writing the check. The original COI was good enough to let them on the job, they finish the job and then....oh we need a new updated COI. Guess what? We have problems with the COI and won't release the check. Poppycock!!!!

I'm currently writing an e-mail and came here to get the name of the association to place in the e-mail.

THanks
Big Dog
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Re: Certs - when will agents all get on the same page

Post by Big Dog »

I would hate to tell you how many times I have to explain to an insurance agent how to properly fill out a COI to evidence the correct insurance coverages. :shock:

'course...I work in risk management and have 25 years of insurance background and paid attention in all the classes I took.
etimer
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Re: Certs - when will agents all get on the same page

Post by etimer »

True! They are the people that make our lives difficult.
Big Dog wrote:I would hate to tell you how many times I have to explain to an insurance agent how to properly fill out a COI to evidence the correct insurance coverages. :shock:

'course...I work in risk management and have 25 years of insurance background and paid attention in all the classes I took.
insuranceoldie
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Re: Certs - when will agents all get on the same page

Post by insuranceoldie »

The issue with special wording on Certificates has grown into a horrific mess! Some states have addressed this issue as well as accord disclaimers on the very certificates issued. However some general contractors or property managers cannot be satisfied.

I may have a near perfect solution to the Certificate of Insurance, additional insured, etc, etc, etc, ad nauseam dilemma? Simply CHARGE the certificate holder (AKA The General Contractor, Management Company or whoever) for the coverages they are requesting! If AMCE Super Builders wants special coverage extensions on the certificate THEY pay for it. They are receiving a benefit from the endorsement. The general contractor is attempting to transfer the risk back to the sub via these special endorsements and certificate wording provisions. Insurance isn't free, someone pays for it! Therefore to charge the certificate holder for their requested endorsements is equitable. It's high time the subs stop paying for the extras.

The result would most possibly be each member of a contract relying upon their own insurance policies 'coverage and their insurers ability to subrogate damages from the negligent party(ies) instead of transferring risk to the sub. I admit this is only a wish but hopefully a productive one?
prowe
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Re: Certs - when will agents all get on the same page

Post by prowe »

I always start with educating my sub contractors before even issuing them a certificate of insurance. I ask them for a copy of the insurance requirements for the project they will be doing. I learned a long time ago the games the general contractors play in holding back payment because subs do not provide the correct insurance coverage insurance on the certificate of insurance. I also advise my insured that the certificate does not provide any coverage and at the time I issue the certificate it specifies the coverage stated on the certificate is in force. I list the project description and or number and location on the certificate and the endorsement numbers and edition dates. I attached all the endorsements to the certificate before I e-mail them to the general contractor. I still receive some grief from time to time but, this has process has helped quite a bit. if my client does not have the coverage specified in the contract I let him know the cost to increase the coverage. if he doesn't want to increase the coverage then it is up to the sub to go back and have his contract amended with the general contractor. it is our job only to provide the certificate of insurance. it is that simple by law we can not put coverage on a certificate that is not present. If the sub contractor did not contact his agent prior to accepting the project then shame on them. Like I said educate your contractors. Let them know that before they accept a project to contact you to make sure the coverage they need is in place before they even bid the job, It will save you and your client a lot of headaches.
etimer
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Re: Certs - when will agents all get on the same page

Post by etimer »

Yep since 1984 I have given that speech a thousand times and a thousand times I get a COI request after the contract has been signed. The deal is "supposed" to be that I read the contract first.
prowe wrote:I always start with educating my sub contractors before even issuing them a certificate of insurance. I ask them for a copy of the insurance requirements for the project they will be doing. I learned a long time ago the games the general contractors play in holding back payment because subs do not provide the correct insurance coverage insurance on the certificate of insurance. I also advise my insured that the certificate does not provide any coverage and at the time I issue the certificate it specifies the coverage stated on the certificate is in force. I list the project description and or number and location on the certificate and the endorsement numbers and edition dates. I attached all the endorsements to the certificate before I e-mail them to the general contractor. I still receive some grief from time to time but, this has process has helped quite a bit. if my client does not have the coverage specified in the contract I let him know the cost to increase the coverage. if he doesn't want to increase the coverage then it is up to the sub to go back and have his contract amended with the general contractor. it is our job only to provide the certificate of insurance. it is that simple by law we can not put coverage on a certificate that is not present. If the sub contractor did not contact his agent prior to accepting the project then shame on them. Like I said educate your contractors. Let them know that before they accept a project to contact you to make sure the coverage they need is in place before they even bid the job, It will save you and your client a lot of headaches.
longhaul
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Re: Certs - when will agents all get on the same page

Post by longhaul »

etimer wrote:Yep since 1984 I have given that speech a thousand times and a thousand times I get a COI request after the contract has been signed. The deal is "supposed" to be that I read the contract first.

I wonder if it would be helpful at all to sign engagement contracts with insureds, that indemnifies* the agency in the event they suffer a financial loss as a result of not providing the contract to you up front? I'm sure someone will say "but that will scare off customers", and it's true. But a doctor won't see you if you don't fill out medical history paperwork; for example, and I'm sure there are examples from other professions. Why is insurance one where practitioners take the risk of not doing things like that?

*edit: Not necessarily that agencies should get indemnification agreements; but at least some form of disclaimer placing responsibility on the contractor client to provide the contract...
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