The review of insurance language and insurance requirements in contracts and leases is critical for ensuring proper contractual risk transfer. Liability can be transferred to other companies or minimized with the use of proper insurance language in contracts. Occasionally risk is assumed intentionally but often it is a result of a failed risk management program. Contracts and leases are often executed where insurance policies are not in compliance with the requirements in the documents, resulting in the possible denial of insurance coverage when a loss occurs. Add an unfavorable hold harmless, indemnification, or exculpatory clause and a firm can be retaining significant risk without even knowing it.
Star Risk consultants are experts at reviewing contract and lease insurance language and analyzing insurance requirements. We ensure that insurance policy coverage is in compliance with requests or suggest modified terms that meet the contractual risk transfer needs of our client. Star Risk will work closely with your staff and legal counsel to review all insurance wording to protect your firm’s risk management interests. A few of the items reviewed include:
- Limits, sublimits and deductibles per line of coverage
- General insurance provisions including additional insured, waiver of subrogation, primary and non-contributory, coinsurance, product recall, business income and others
- Hold harmless, indemnification and exculpatory clauses
- Certificates of insurance requests
- Other insurance requirements including rating and size of insurers and notice provisions
- General contract terms and conditions affecting desired contractual risk transfer
In addition to reviewing contracts and leases required by third parties, Star Risk also advises on how insurance language and requirements can be crafted to transfer risk to other parties including suppliers, vendors, consumers and other parties. Often vendors and service providers will agree to terms and requirements to retain business or they do not have the sophistication to understand the impact of certain wording or clauses on their risk management program. We will work with your staff to develop a sound and efficient contractual risk transfer process using industry specific insurance language and insurance requirements.
Star Risk does not provide legal advice but often attorneys come to us for insurance and risk management counsel. We ensure that contract terms are reasonable and comply with policy insurance language, risk contractual transfer is appropriate for the risk program and all is understood by our clients. The review of insurance language and requirements in contracts is a service included in our standard fees. We welcome the opportunity to review a few of your contracts and provide some thoughts to show the value Star Risk will add to your firm’s risk management program.
