Bush Featured in State Bar of WI: Insurance Coverage for Downstream Contractors and Suppliers
Director of Property & Casualty Captive Practice
As the construction industry continues to evolve, it becomes increasingly important for construction companies to safeguard themselves against potential risks and liabilities. One crucial aspect of risk management is ensuring that downstream contractors and suppliers have adequate insurance coverage.
This article outlines steps construction companies should take to ensure proper insurance coverage for their downstream partners and discusses the significance of certificates of insurance, the limitations they pose, and the importance of various policy endorsements.
About Certificates of Insurance
It is important to require certificates of insurance. Requiring certificates of insurance from all downstream subcontractors and suppliers is a crucial step for construction companies.
Certificates of insurance serve as a verification tool that a subcontractor or supplier has insurance coverage at a given point in time. They provide assurance to clients, contractors, and other parties involved in construction projects that the subcontractor or supplier has taken steps to manage potential risks and liabilities and comply with the insurance requirements of the construction contract.
Limitations of Certificates of Insurance
Despite their importance, it is essential to recognize the limitations of certificates of insurance.
Their information is limited. Certificates of insurance provide a snapshot of coverage at the time of issuance. They may not include all pertinent details, such as policy exclusions or specific endorsements that could impact coverage for certain types of claims.
Request and Review Crucial Policy Endorsements
Given the inherent limitations of certificates of insurance, construction companies should request and review crucial policy endorsements to fully understand the scope and limitations of their downstream partners’ insurance coverage – including the additional insured, waiver of subrogation, and primary and non-contributory endorsements.
