I have a client who is asking to be named as an “Additional Insured” on my G/L policy.
Perhaps I am casual or too trusting in my business when it comes to stipulating all of the insurance requirements, but I have never had anyone ask for this before.
I talked with my ins. agent and it can be done for a relatively minor cost, but he assured me that it is out of the norm for residential projects of this scope and size.
Background- the project is a small addition with a deck, partial covered patio, and an arbor. Project cost 50k.
How do you handle this request? Is this normal for your area? Am I exposing myself one way or the other by doing this or not?
Advice appreciated.
Replies
I have done it once, on a small project. My agent did not blink, did not charge me, and said it was fine, that it might actually be cleaner and easier if there was a problem related to the job and a third party sued the neighbor.
The client is wise and is doing something few do. But it is common in commercial projects. When I hire contractors at work, our corporate policy states this must be provided or we can't hire the contractor. We require contractors to maintain a liability policy of a certain amount in order to do any work on our property. It protects us in case a third party (visitor, passerby, neighbor, delivery service, etc.) is injured by way of the construction.
This does two things to reassure the client, and by accommodating the request you are presenting a professional image as a legitimate contractor. First, it proves to the client that you are insured and lists the amount of coverage. Second, when the client is listed as an Additional Insured, if your insurance should lapse during the course of the work, the client will be notified by the insurance company. So the client knows you didn't just buy a policy to get the job and cancel it after the contract is signed.
Your agent should provide this free; its done all the time.
I think your client is informed and smart. "Additional Insured" clauses, among other items, ensure that the client is getting the maximum protection available. Assuming your insurance is actually in effect you have nothing to worry about.
Jon Blakemore
RappahannockINC.com Fredericksburg, VA
Maybe it's just me, but it's setting off alarms in my head.
Not that he wants it, that he's asking.
He's possibly either read too much, but not enough somewhere or something. I don't think I'd mind having it done for a client, however I'd want to know why he's asking and probe a little deeper to try to figure out if the guy is going to be PITA.
I know that's reading a lot into nothing. When customers start making unusual requests it trips off something in my head.
The client may simply be in a business where it's done routinely and may think nothing of it. Considering how simple (and prudent) this request is, I'd be reluctant to hire anyone who was reluctant or skittish to provide this piece of documentation with no questions asked.
I definitely understand where you're coming from. My initial feeling, like Henry, is that this client is in a business that makes him familiar with insurance requirements. Or maybe has an insurance agent as a good friend that told him to ask to get named so the contractor doesn't cancel the policy a week after the job starts.Maybe you're right, and this request is just the tip of the iceberg. Hopefully the OP will be able to determine which one it is- an educated client or the biggest pain in the neighborhood. Oh the joys of being a contractor...
Jon Blakemore RappahannockINC.com Fredericksburg, VA
With out meeting and talking to the guy it's impossible to say.
The request itself I have no problem with and would do if asked IF I felt comfortable with the individual as a client.
I can look back on several occasions where something in my gut just didn't feel right and I wish I would have listened to it.
What I'm getting at is, I'd want to feel out the situation and the individual and go from there.
50/50 he's either a smart individual protecting himself vs. he's going to be a difficult client.
As some of you have suspected, the client is in an industry where these insurance requirements are standard.
He works for a consulting firm where they handle large commercial projects. So I believe he is simply transferring what he feels is common practice to this project.
As far as him potentially being a difficult client, I feel the opposite. He and his wife have been quite easy to get along with during the initial planning stages. The final price as well as the balance of the contract language was not questioned at all. His only point of contention has been the insurance.
Like CAGIV, I might be more concerned if there had been more challenges to the contract or pricing, etc. or if he was someone I had just met cold. However, I have known him for over 8 years.
I am planning to honor his request, it just caught me a little off guard since I have never been asked to do it before. I think a lot of contractors in my area (myself included) get a little lax in providing all the documentation/paperwork that accompanies a remodel job.
thanks
Not sure how relevant this is, but here in Canada, contracts for the feds require that 'Her Majesty the Queen', as represesnted by Government Agency X, as represented by the CEO, be named as a co-insured.
My insurance agent just keeps it on my policy from year to year, as I get the odd contract most every year. No charge.
Done here routinely. Just call my broker, give him the name of the client and I get a form faxed to me naming the client as 'additionally insured" usually by the end of the day. No fee ever. My subs do this for me as well. If your insurance guy is charging anything more than a fax charge, you are getting porked.