The process of risk management includes the practice of identifying and analyzing your exposure to loss, and taking steps to minimize these exposures to levels acceptable to your company. Many times this involves methods or procedures not necessarily related to direct insurance coverages. Basic risk management procedures can involve techniques used to control losses (i.e. loss reduction, loss prevention or exposure avoidance), and risk financing techniques involving transfer of risk or retention of risk by your organization.

Additonal Insured's - Monitoring Procedures
Being named as an additional insured in anothers policy is an excellent risk transfer technique. To maximize the usage of this procedure and minimize your exposure to loss/claim assumptions, steps should be established to determine which exposures might best be transferred to another or assumed yourself. Back to top

Advertising Copy Reviewed
All written material used in the sale and promotion of your products should be reviewed by legal council to ensure that no copyright infringements or inaccurate statements exist. Back to top

Appraisal Recommendation
It is common for buildings or personal property values to dramatically increase over the years. As part of your risk management program we recommend that periodic appraisals be done to check the adequacy of existing coverage for your buildings and equipment. This is advantageous since it takes the guesswork out of determining what amounts of insurance should be carried and provides a sound basis for settlement if loss occurs. Even though we personally do not provide such services, we can provide you with names of several professional appraisers who you may retain for such evaluations. Back to top

Certs of Ins - Contractors
As part of your risk management program we recommend that you require insurance certificates verifying General Liability and Workers Compensation insurance by all contractors before they are allowed to start work. Failure to verify coverage can result in you assuming unintended loss exposure. For example, current legislation makes you responsible for injury to employees of independent contractors who fail to maintain adequate Workers Compensation Insurance while working for you. Back to top

Certs of Ins - Modified
Standard certificates of insurance do not require notice of cancellation by an insured. It is recommended that the wording be changed to include such requirement to ensure that you are given adequate notice of lapse or reduction of insurance for all contractors doing work for you. Back to top

Certs of Ins - Procedures
To protect against inadvertent loss or claim assumption, control procedures should be established to document all new and renewal certificates of insurance received from others. Back to top

Certs of Ins - Requirements
To verify insurance requirement compliance, certificates of insurance should be required from all subcontractors, suppliers, vendors or other parties when evidence of coverage is needed or required under contract. Back to top

Contingent Loss Protection - Alternate Locations
To reduce the impact of shutdown of your operations, a contingency plan should be developed to ensure that alternate locations and services can be used until normal operations are resumed. Back to top

Contingent Loss Protection - Alternate Suppliers
To protect against loss resulting from interruption of materials or services from key suppliers, alternate sources should be identified. Back to top

Contingent Loss Protection - Key Employees
The loss of key employees can be disastrous to an organization. To reduce the impact of such losses, these individuals or groups of individuals should be identified and contingency plans developed as to how your firm will handle such eventualities. Back to top

Contracts Reviewed
All contracts should be reviewed routinely by legal counsel to ensure that you are not assuming any unintended liability, including hold harmless agreements, lease arrangements, contracts of carriage or purchase orders. Back to top

Loss Reduction - Duplication
To reduce the impact of loss, consideration should be given to maintaining backup parts or records for critical assets used in your business. For example, duplicate records can be created or spare parts maintained in case key resources are damaged or destroyed. Back to top

Loss Reduction - Segregation
To reduce the impact of a fire loss, consideration should be given to separating finished stock and/or inventory from other operations. This can be done by constructing an adequate fire wall or door within a structure or physically removing these items to separate locations. Back to top

Non-Admitted/Assessable Policy
Your choice of an insurance company should not be based totally on price or even coverage comparison. Three additional factors should be considered when making your selection. These include:

1) the stability and financial condition of the carrier,
2) whether the policy issued to you is assessable, meaning that if the company becomes insolvent you as a policy holder cannot be held liable for its outstanding debts, and
3) is the company an admitted carrier in the states where you do business.
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Non-Insurance Risk Transfer
In all contractual relationships, it is advisable to transfer to others all risks of loss from chance events appropriate to the transaction and relationship of the parties. For example, suppliers and/or subcontractors should be required to provide certificates verifying they have General Liability and Workers Compensation insurance. Additionally, a hold-harmless provision should be included in all contracts with these individuals to protect you against suits arising from their products or services. Back to top

Rental Agreements Reviewed
All rental and leasing agreements should be reviewed by legal counsel to ensure that you are aware of any liability assumed under such contracts. Back to top

Review All Named Insureds
Frequently overlooked, the careful review of all named insureds should be done as a standard renewal procedure. Policies cover only those individuals, partnerships, corporations, or joint ventures who are actually named in the policy. Additionally, in the event of a property loss, the amount of settlement could be reduced by the percentage of ownership of any intentionally unnamed individuals. Back to top

Review Insurance Expense Costs
Approximately fifty cents of each premium dollar you pay is spent for costs other than the paying of claims. One method of reducing these charges is to "unbundle" the services provided by these costs to ensure you are receiving the best value for you insurance dollar. Back to top

Review Loss History and Reserves
One of the major components of insurance costs is directly associated with loss experience. As part of your overall risk management program we have reviewed your past loss history and current loss reserves to ensure that they are accurate in nature. Back to top

Review Loss Payees/Mortgagees
As part of your risk management program, a careful review of all loss payees and mortgagees should be completed. Problems can arise in loss settlements if these individuals are not correctly listed in your policy. Back to top

Waivers of Subrogation - Bldgs. Under Construction
It is recommended that all construction contracts (including the Builders Risk policy) incorporate clauses waiving all rights of subrogation against all involved contractors or owners. Failure to do this could allow unnecessary legal action. Further, many contractors Liability policies may not provide adequate coverage for these types of claims. Back to top

Waivers of Subrogation - Completed Projects
It is recommended that you try to obtain, in contracts for all jobs, waivers of subrogation from owners who purchase the permanent insurance on completed projects. This risk management technique will greatly reduce the possibility of legal action against you as a contractor. This is important since standard General Liability policies greatly restrict or exclude coverage for loss or damage to a contractor's own work. Back to top

Waivers of Subrogation Reviewed
Subrogation clauses are found in nearly every insurance contract. Basically, they waive, mutually or unilaterally, your or your insurance company's right of recovery against a third party. There are many kinds of situations where one or more of these clauses is appropriate in an overall risk management program. Back to top