For Nightclubs, Upscale Casual, and Fine Dining Restaurants
Contractual Risk Transfer: What It Can Mean to Your Business
A sound business practice to protect and potentially increase the amount of insurance available to you at no additional cost begins with a review of your lease of premises, service providers, suppliers and vendors contracts. Contracts should clearly define the scope of services and responsibilities of the parties to the contract.The hold harmless/indemnity agreement within the contract should then transfer the risk from one party to the other for their respective responsibilities, each providing indemnity to the other. Your landlord, service providers, suppliers and vendors should all indemnify you and hold you harmless for any and all liabilities which arise out of their actions or in some cases their inaction. Support for this indemnity should come in the form of an additional insured endorsement to their general liability policy.
It should also be required that their policy be endorsed to provide coverage under the additional insured endorsement on a primary and non contributory basis.This requirement causes your coverage to become excess and theirs primary. The financial strength of the insurance company whom is supporting the indemnity and the limits provided should be examined. The indemnity is only as good as their ability to pay. G.A. Crandall has an attorney on staff as well as personnel familiar with hold harmless/ indemnity agreements and additional insured endorsements.
We are available to review our clients contracts relative to the insurance requirements and hold harmless/indemnity agreement.This service is included at no additional charge.
In the attached articles from Fireman's Fund Lessons Learned library you will read about actual claim's that have occured, their outcomes, and what risk transfer techniques should have been employed:
Risk transfer used properly and executed correctly can mean the difference between you or your policy paying a claim or the actual responsible party paying the claim. One of the first and least costly steps you can take to controlling the direct and indirect cost of claims is to make sure you have agreements with all landlords, service providers, suppliers, and vendors.
These agreements should be reviewed by a competent experienced practitioner and certificates of insurance should be maintained and updated on a regular basis. You should always consult with an attorney before drafting or signing any contract. Please contact Patrick Nolan to receive a free copy of the General Liability Risk Transfer Checklist from the Fireman's Fund Safety Resource Center.
This checklist contains useful information on how to manage a risk transfer program along with a sample letter you can use to request risk transfer documents.
