Don't Overlook Risk Transference

National Federation of Independent Business: "One aspect many small to mid-size businesses overlook is risk transference. No major company Kuhn is aware of fails to transfer risk wherever and whenever it can. What should you do? At a minimum, ask your subcontractors to name you on their policies as additional insured on a primary/non-contributory basis. Ask the manufacturers of the products you sell or your suppliers of component parts to do the same. Verify the adequacy of their limits and follow up every year. You may believe they will balk at your request, but you will probably find they are doing it for your competitors. Review your contracts to verify you are passing on risk were appropriate and the contracts you are signing are not conferring liability for which you are unprepared."

Posted by Dane on May 26, 2005 | 1 Comments

Comments

1 comments.

Tim said on June 08, 2005:

That insistence on being named additional insured on a "primary and non-contributory basis" is the cause of many headaches and much wasted time in the insurance business. "Primary" is an industry standard term, but "non-contributory" is not. The lawyers and risk managers who ask for it may not even know what it means.

The fact is, if your Commercial General Liability policy is the ISO 00 01 form with an edition date after 1997, your insurance is automatically excess over any other policy that names you as an additional insured. Therefore, the whole "primary/non-contributory" requirement is basically unnecessary.

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National Federation of Independent Business: "One aspect many small to mid-size businesses overlook is risk transference. No major company Kuhn is aware of fails to transfer risk wherever and whenever it can. What should you do? At a minimum, ask......
from Business Opportunities Weblog on May 26, 2005

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