An often overlooked component of risk management programs is the handling of certificates of insurance. Contractual risk transfer is a critical part of any comprehensive risk management program and it starts in the contracts you enter in to with other parties. Certificates of Insurance evidence the coverage you agree upon in a contract, allowing you to confirm the required coverage is indeed in place. Below is a list of items you should review when receiving a certificate of insurance from another party providing services or products to your firm:

1. The insured name and address of the other party matches the contract in place.
2. The certificate holder name should correctly list your firm and address.
3. The certificate should be recently issued. The date of certificate issuance is critical to verify the coverage is current and in force.
4. Insurers, along with their proper NAIC #, should be listed to allow you to verify they are adequate in terms of size and strength and meet your requirements.
5. Policy expiration dates and policy numbers should show current coverage.
6. Lines of Coverage should be appropriate for the services or products provided as outlined in your contract. For instance, if automobiles will be used on your premises, Auto Liability coverage should be evidenced along with workers’ compensation coverage in case an accident occurs.
7. Limits of insurance should be sufficient and commensurate with the potential risk for loss. A firm demolishing a building will require much higher insurance limits then a vendor hanging curtains.
8. Special coverage requested in the contract should be referenced on the certificate, including additional insured status, waiver of subrogation, limits per location or project, occurrence based coverage, and primary, non-contributory status. Language should be added in the “Description of Operations section and the appropriate boxes on the certificate should also be checked as appropriate.
9. Cancellation provisions should match the contract requirements and be agreed upon by insurers.
10. The issuing broker’s name and address should be shown under the Producer section, along with a signature of an authorized representative.

Risk Manager’s Takeaway:

After examining thousands of certificates over 20 years for clients, I am amazed at how many certificates are incorrectly issued and not properly reviewed by brokers, issuing parties or most importantly, the receiving parties. A little due diligence up front can save a lot of sleepless nights if and when a large or catastrophic loss eventually occurs (knock on wood).

An effective fleet program can save your company money, protect your company assets, and prevent employee injuries and even death.  Sometimes an accident can occur when it is no fault of a driver while at other times the driver involved in an accident had no right being behind the wheel. Your drivers can pose a significant risk to your organization and you have an obligation to ensure they are safe and do not pose a threat to other drivers on the road or the property of others. Below are several things to consider when creating a fleet loss control program:

1. DOT Compliance: First comply with federal law and make sure your employees maintain Commercial Drivers Licenses (CDL) issued through your State if required by your operations and vehicles being used. Contact your State DMV for additional information.
2. Inspection of Vehicles: If your company owns vehicles you must ensure that they are safe and regularly inspected. You should have a pre-trip inspection checklist completed by drivers to identify any issues or damage to the vehicle to be used.
3. Maintenance of Vehicles: Your vehicles must be maintained on a regular basis to ensure they are safe to operate. Regular maintenance should include oil and fluid checks/changes, tire rotations and replacements, alignment of tires, checking brake pads and rotors, replacing filters, and wiper changes to name a few. As additional miles are driven, major components of the vehicle must be inspected including the engine, transmission, belts, etc. Numerous apps, GPS and telematics, are available to track mileage and to remind management when vehicles are due for servicing.
4. Driver Selection: Motor Vehicle Reports (MVR) should be checked for every employee upon hire and at least annually thereafter. The reports should be inspected for major violations including driving while intoxicated or careless driving, accidents, moving violations including speeding or failure to use turn signals, and non-moving violations. Criteria should be established and uniformly applied to all drivers, outlining what is an acceptable MVR and what is not. Unsafe drivers SHOULD NOT be permitted to drive on any company business.
5. Personal Vehicles: A Personal Vehicle Use for Company Business policy should be enforced. If an employee is to drive their personal vehicle on company business, that person must be a safe driver as supported by regularly inspected MVR’s and must maintain insurance on the vehicle from an acceptable carrier with limits as specified by the policy.
6. General Safety: Safe practices including seat belt use, no eating or drinking, no cell phone use, limiting distractions while driving, no driving while intoxicated or on any medications, obeying all traffic laws, no picking up hitch-hikers or driving other non-employees, and similar best practices should be specified.
7. Accident Reporting/Investigation: An employee accident reporting, manager and company review and investigation process should be specified in the program. An Accident Review Board should be put in place to evaluate any and all incidents involving a vehicle.
8. Training: Driver training is critical and in-person and on-line training should be provided on a regular basis. Training and employee sign off on the fleet policies should take place.
9. Insurance: Proper insurance must be maintained with coverage endorsements added to properly address the risk of the business. An insurance professional should review your fleet program and place the correct policies to protect your business.

Risk Manager’s Takeaway:

Star Risk Consultants will audit your current fleet program and your operations. A Certified Safety Professional will provide expert advice on how to improve your program and make it world class. A comprehensive fleet program can reduce your company risk, protect employees and ultimately save you insurance premium dollars and the enormous costs associated with accidents.