I frequently get calls from prospective clients and customers that sound like this: 

“I’m signing a contract with XYZ Organization and need insurance.” 

“When are you looking to sign the contract? And can you send me a copy of the contract?” I ask them. 

At this moment, one of a few things will happen: 

  1. They will say they are planning to sign it in 6 weeks, and they are planning ahead. They will immediately send the contract.  
  2. They will say they’re planning six weeks in advance but need to get their hands on the contract. 
  3. They explain they are signing the contract tomorrow. They haven’t looked at the contract, and they don’t have a copy of it. 

Scenario number 3 is a problem. Several risk factors are present: 

  1. The insurance they need may take time to procure.  
  2. The limits they need might make the contract not financially feasible.  
  3. The insurance might cost more because there isn’t time to price it out in the marketplace properly.
  4. The language in the agreement might need underwriting approval. 

With adequate time and money, your insurance broker should be able to find everything you need. But when you take away either time or money, your options shrink. 

Here are some examples of organizations that will have insurance clauses that you need to review: 

  1. Mortgagees 
  2. Condominium associations 
  3. Landlords 
  4. Partner Organizations 
  5. Vendors 
  6. General Contractors 
  7. Customers 
  8. Grantmaking Organizations 
  9. City, County, and State organizations 
  10. Accrediting and Licensing Organizations 
  11. Organizations you volunteer for 

Every time you sign a contract, you, your insurance broker, or your attorney must carefully review the insurance and indemnification agreements. Each contract you sign will set expectations for the level of coverage you carry and the level of responsibility you will have for the operations inside the building. You need to look for the following types of information: 

  1. Types coverage required 
  2. Coverage limits 
  3. Waivers 
  4. Hold Harmless Agreements 
  5. The property you are responsible for insuring 

This is why I strongly recommend reviewing contracts well before entering into one. It gives you and your insurance broker time to get you the insurance you need with a price that hoepfully won’t put your project in jeopardy. 

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