Risk management information specifically for contractors
UNICO Group has the resources and expertise to help contractors address and control all of their risk management issues. UNICO can handle all of your bonding needs. Our UNICOMP program will help you reduce workers compensation costs. ClientConnect can assist with your overall safety program by providing all the tools you need. In addition we can assist with OSHA training and compliance. In addition it can allow you to complete your OSHA logs on-line! UNICO Group also provides contract review for you to ensure you have the proper risk transfer mechanisms in place.
Contact us today to learn more about the services we can provide for you. We can provide sample contracts for risk transfer as well as providing a Risk Management Guide with a Risk Transfer Checklist.
Risk transfer is an agreement whereby for payment of specified losses will be shifted from one party to another. The higher tier transfers its responsibility to pay losses to the lower tier. The lower tier assumes the responsibility to pay losses of the higher tier. Effective risk transfer can result in the following benefits for a contractor: Contractors should fully understand the consequences of each clause in the contracts they sign, before they sign them. The contractor and their legal counsel should determine if the contract is in the contractor’s best interest. If not, legal counsel can help negotiate the removal or modification of unacceptable terms. Other reasons to consult with legal counsel are: an attorney can help draft/interpret an indemnification agreement, contemplating state laws that apply; it’s nearly impossible to draft a single contract that will work in every state; each contractor is unique and requires risk management processes tailored to its circumstances; attorneys can provide the latest, up-to-date interpretations of current laws which can be important as states seem to be trending toward enforcing only more narrow indemnity agreements. Your agent should review the insurance requirements to determine deficiencies in your insurance coverage and to determine whether those deficiencies are insurable or not. The time to find out what insurance you can buy is before you sign the contract requiring you to have the coverage. If a contractor hires a sub that has low limits of insurance or no insurance, the contractor’s own insurance likely will be responsible for payment of losses that should have been the responsibility of the sub. By requiring adequate limits of insurance, the contractor is counting on the sub having the funds available to pay liability it has assumed. Subs that present a greater exposure should be required to carry excess (umbrella) limits. Since the contractor’s general liability policy will respond on its behalf to claims arising out of a sub’s work, the contractor’s objective should be to keep such claims out of its own insurance to the extent possible. A contractor can accomplish this by requiring additional insured status of the sub’s general liability policy on a primary basis. There are so many variations of additional insured endorsements, it is necessary to specify in the written contract (when you are the higher tier) the additional insured endorsement being sought (by form number and edition date). Effective record retention allows contractors to identify potentially responsible parties, identify potential witnesses, and compile contracts and insurance information from other parties.