Your organization may often rely on critical relationships with a vendor, contractor, tenant, or another third party. You may even be part of several contractual relationships at one time, and because of this, it’s important to control the type and magnitude of the liabilities you assume and wish to transfer.
Often, we see companies relying solely on their staff or in-house software. However, these processes may not give you the results you need. Your staff may not have the time or expertise, and with that, may not review a certificate for full compliance. As a result, not identify when an endorsement form isn’t providing the contractual coverage you are seeking. This leads to an increase in liability exposure that might not be identified until it’s too late.
Here are nine key areas to focus on for establishing an effective risk transfer program.
- Work with your attorney to develop a third-party contract.
- Determine appropriate levels of insurance coverage and limits specific to the work, services, or relationship with the third party.
- Require certificates of insurance and applicable endorsement forms.
- Secure a signed and written contract.
- Develop a system to collect signed contracts and review certificates of insurance.
- Enforce compliance with insurance requirements.
- Create a filing system to follow up on non-compliance and expiration.
- Ask for additional insured status and obtain copies of additional insured endorsement forms.
- Collect and retain contracts and certificates in accordance with applicable laws.
Contact a Marsh McLennan Agency (MMA) advisor to find out how we can help you control your claim costs, meet compliance goals, and achieve measurable results.