Even Where You Think You Have Coverage…Check Again… ICA Helps Design and Implement a Certificate of Insurance Program

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Even Where You Think You Have Coverage…Check Again… ICA Helps Design and Implement a Certificate of Insurance Program

A commercial real estate owner had a slip and fall claim which took place on property that was the responsibility of the tenant to insure. The lease required the tenant to maintain the insurance and to indemnify and hold harmless the landlord for any claims arising on the leased property. Yet, when the claim occurred, the landlord was sued along with the tenant. When the landlord tried to have the tenant’s insurer take over the defense and indemnification of the claim against the landlord, the insurer pointed out its duty to defend and indemnify only applied to its own named insured, the tenant, as their insurance policy did not have the proper endorsements covering the interests of the landlord. Additionally, no indemnification would occur unless and until the insured was found actually liable for the loss. So, this landlord had to pay for their own defense and attorneys’ fees with the hopes that eventually it would be repaid by the tenant and/or its insurer.

As this property owner did not like the way this situation worked out, they contacted ICA, recommended by another real estate owner. After a complete audit of the landlord’s existing insurance program, in conjunction with their current leases, ICA found that the insurance the tenants were required to maintain was inadequate and did not properly name the landlord as additional insureds. The tenant’s insurance program also had severe limitations as to what rights applied to the landlord on any claims relating to the leased property. ICA also found that the landlord’s own insurance program offered no coverage for anything which was supposed to be insured by the tenant and it contained severe policy restrictions.

ICA pointed out to the Client that the certificates of insurance they were supposed to be seeking from the tenants were not providing the proper information, did not provide access to the tenant’s insurance protection, and that no one was checking the policies the tenants were maintaining. ICA developed a certificate of insurance program by drafting letters for use for each particular type of tenant or service provider, created a custom Certificate of Insurance form for this Client’s use, and educated their staff on how to manage and follow through on all the steps to get a truly protective certificate of insurance program in place. In consultation with the Client, ICA determined that the best way to move this project forward was by training the Client’s own in house staff to maintain the certificate program after its initial creation. The cost to them was minuscule when they compared it to what they have received as far as benefits in now having an organized, thorough Certificate of Insurance Program in place that protects the interests of the landlord. See our Design and Management of Certificate of Insurance Program Service.

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