When subscribers asked - or demand - that you add them as additional insureds on your insurance policy what should you do? If it's an important subscriber you are going to want to add them. I suggested that I had no real problem with adding them. But here are comments, and advice, from 2 industry brokers and 1 plan administrator.
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Ken,
The request for Additional Insured status has become very standard. It is an extension of coverage and most policies/carriers offer this either by an individual endorsement or via a blanket endorsement. The cost depends on the insurer. Most policies that our carriers issue have a blanket additional insured, where required by contract, and there is not an additional premium for this.
The alarm company should look at each request and make an educated decision as the whether or not they want to extend the coverage. It is normal and customary for an entity/customer to request additional insured status from the alarm company for while the alarm company is on their premises installing or servicing.
I’d recommend that the alarm company contact their agent to discuss the particular requests and to review their “certificate / additional insured” lists annually. If there is no on-going installation/service then there probably isn’t a need to renew additional insured certificates that were issued in prior years.
Thanks again for keeping us all connected via your email network! Alice Cornett Giacalone Senior Vice President Berrian Insurance Group
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Additional Insured Comment/response
Ken,
Yes, some insurance companies do give insured's a hard time and it is for their own good, the industry uses your contracts to shed/shift/limit its liability exposure and when the contractor adds anyone as an additional insured the contractor has increased their liability exposure. The contractor should always give some resistance to the customer when the request occurs without hesitation. The response should include a statement of resistance something like this - "We carry insurance for our benefit (so our company does not go bankrupt) to make us whole if we become liable to you for some act that may occur solely on our part while we are on your property. We are happy to provide you with a certificate of insurance that our policy is in full force and effect".
At SARRG (Security America RRG) we don't give the contractor a hard time, but in our collective interests we include language on our certificates that limits the exposure of the additional insured certificate to coverage for actions that the contractor is involved and occurs only while the contractor is on the premises only.
The problem for contractors is that an additional insured relationship without limiting language allows the holder of the certificate to make claims directly with your carrier without your consent and for claims that may not have anything to do wi th you. So if your coverage is very broad the insurance company (if it does not have your sole interest in mind) will pay on claims without telling you affecting your loss history.
SARRG is an admitted insurance company in all 50 states that is owned by the NBFAA and its policy holders. It is owned by the industry, operated by industry professionals under the oversight of the State of Vermont Insurance Commissioner and reinsured by Swiss Re. SARRG also is managed by insurance industry professionals, audited in accordance with State of Vermont regulations annually and files business reports with all jurisdictions (such as the 50 states Insurance Commissioners) annually as required.
The strength of SARRG for today's contractors is that we know what you do, we know what the exposures are, this book of business is not a footnote to the carriers business. Every claim that is processed by SARRG comes by my desk and if it is bogus or not the liability of the contractor we will defend the contractor rather than pay it. The difference is that we know what is bogus and that protects our insured's.
Bart A. Didden
SARRG Member Board of Directors
Executive Claims Manager
President - USA Central Station Alarm Corp.