Certificate of Insurance Requirements in Contracts for Architects/Engineers
There are often many requests in contracts with regards to insurance limits and requirements. Before signing the contract, review the insurance limits and requirements in comparison to what your current limits and policies include. Here are a few issues that are typically seen in contracts with regards to the insurance requirements.
Limits of liability on Professional Liability. From time to time there are requirements in a contract for higher limits that what your firm currently carries. It could be either for the project specifically or to increase your firms practice limits. Depending on several factors the insurance may be able to offer higher limits. They will request information about the project, such as construction value, project type, services offered and your firm’s billings for the project. It will then be determined if the insurance company can offer a higher limit for the contract requirements.
Additional insured requirements. The additional insured language is typically available on your firm’s general liability policy. There must be a written contract that is requiring the additional insured language, in most cases, on general liability. Workers compensation and Professional Liability do not have additional insured language available in the policies.
Waiver of subrogation is often a requirement on certificates of insurance. The waiver of subrogation provision prevents the insurance company from suing the party in the contract. This is typically available on the workers compensation (by endorsement), general liability and Professional Liability as required by written contract.
Umbrella policy requirements come up occasionally as well. Your firm will need to have a general liability in place in order to have an umbrella policy. It is not uncommon to have an umbrella requirement in a contract. The umbrella policy is not an umbrella over the Professional Liability policy but is over the general liability, automobile liability and workers compensation policies.
If you have questions with regards to insurance coverages please call or email your Professional Underwriters agent for assistance.