All contractual agreements have a certain level of risk associated with them, and the legal and business perspective are not always in line with the risk perspective. Therefore, these documents should be reviewed by not just your attorneys, accountants and insurance brokers, but also by a risk management professional trained in evaluating what risks lie within the contract, and how best to transfer or manage that risk. Brokers simply do the processing and deliver the paperwork, often with no analysis or assessment of the risk within the contracts, either because they are not asked or are not adequately educated to perform this analytical task. An analysis is necessary to understand the risks inherent in the agreement, which may not be readily apparent to your brokers, accountants or attorneys.
Whether it be a lease, a merger or acquisition agreement, a licensing of a new product, or a request to add another party as a named insured, the ramifications of how these clauses are drafted, and the action or inaction by the interested parties can have grave consequences on the business.
So how does a business know its language is drafted in its best interests? ICA’s staff of attorneys and experts in insurance contract language can review your existing or proposed agreements, whether a merger or acquisition, a lease analysis, or any contract requiring one party to hold harmless or indemnify another, and make recommendations to seek to pass the risk of loss to the party better suited to handle the exposure. ICA can instruct your brokers as to the appropriate language for any certificates or endorsements to be issued, and can instruct your attorneys as to the most effective language for managing the risks, relative to any contracts you may enter. Thereafter, once the language is finalized, ICA can assure that the party to whom the risk of loss is falling is adequately protected by insurance and has properly named the other party as an additional insured, through both a certificate of insurance and actual insurance policy endorsements supporting this evidence of coverage.
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