No doubt that Risk Management is important in the construction industry. The cost of accidents and improper installation can be immense and can threaten the very existence of a company. But with insurance companies, it is no longer risk management, but risk avoidance.
Have you ever noticed that the same insurance companies that advise General Contractors to add all these additional insureds, waivers of subrogation and other restrictions are the ones telling Subcontractors not to agree to them? In fact, insurance companies are starting to require subcontractors to obtain addenda to subcontracts regarding insurance coverage before issuing a certificate of insurance.
Here are the latest ones I have come across in a contract from a General Contractor that our insurance company absolutely will not bend on.
· Requiring the general contractor, architect and engineer to be SCHEDULED Additional Insureds. The insurance company insists they are all covered by blanket coverage when required by the contract.
· No Deductibles. The general contract requires all policies to be no deductible on CGL and WC. How many subcontractors can afford a no deductible policy these days? Our insurance carrier does not even write them.