The Importance of Additional Insured Protection
When vetting and selecting vendors for maintenance and repairs it’s important to insist on being added to the insurance declarations page as an additionally insured party.
We all feel more confident working with vendors we’ve established long-term relationships with, because it makes us feel more comfortable. However, remember that even the best vendors run into issues, like any other small business owner.
Vendors don’t just rely on their crew, but sometimes even more so on sub-contractors as well. Make sure you are intimately familiar with any vendor or sub that steps foot on your property. That means getting their CA state contractor license numbers, together with a copy of their insurance declarations page.
It’s recommended to only accept insurance certificates from the vendor’s agent directly. That way you know for a fact the information listed on the certificate is accurate.
The certificate should clearly state the following:
1.) The vendor’s full business name including any DBA’s.
2.) The vendor’s mailing address and contact information.
3.) All of the insurance carrier’s information, their rating (A, B, etc.) and whether or not they are “California admitted.” Consult with your insurance professional for an in depth explanation of what this means, and why it’s important. It will be covered in a future article.
4.) A list of what is covered with limits/sub-limits, and (equally as important) what’s not covered — also known as an exclusion. One example is mold. Many insurance policies include fine-print stating that while water damage may be covered, mold remediation sometimes is not. If that’s a priority to you, talk to your insurance agent about it.
5.) Your name as an additionally insured party.
If work is underway and something unexpectedly goes wrong, sometimes vendors don’t have the means to cover the damages. In other instances the vendor either refuses to file a claim against their own policy, or they simply disappear.
If that happens, and your name is listed as an additionally insured party, you may be able to contact the carrier directly and file a claim.
Should you need help with ideas to consult for insurance vendors or would like quality representation to help you get the most value for your real estate when selling, feel free to contact us!