NYC Insurance Blog

Review Your Contracts with Your Insurance Broker!

Having commercial coverage means that if you incur any damages from a covered peril, the insurance company will cover the resulting costs, saving your business finances. While damages can emanate from business-related events such as employee injuries, third parties such as clients can also cause financial harm to your business.

For instance, a negligent client can cause a fire that burns down your premises. The involved client's insurance company should cover the losses incurred in such a case. However, this can only happen if you don't include a waiver of subrogation when signing your contract with the client. 

So, why is discussing a contract important to discuss with you insurance broker?

When negotiating a contract with a potential client, it is prudent to check whether or not there is a request for a waiver of subrogation. In case the agreement requires you to sign the waiver of subrogation, the best option is to ask the client to remove the clause before you sign it. Signing the waiver puts your client's financial burden on your insurance provider. 

In other words, if a peril is not your fault, your insurance company will still have to pay for the resulting costs instead of filing a claim with the client's insurance provider. Clearly, this will not work well with your insurance carrier, and they may, in turn, increase your coverage costs. Give us a call to review your insurance and contracts for new jobs!

Failure to sign the waiver of subrogation may seem like neglecting your clients’ needs. However, we understand that this is the best option for you and your insurance company. Most importantly, some contracts will REQUIRE waiver of subrogation, and even action over coverage, which can cost you more money yearly!

The good news is that you can still protect your clients by including them in your commercial general liability insurance policy as additional insureds. The commercial insurance policy typically covers the liability costs emanating from third-party liabilities. Depending on your agreement with the insurance provider, the additional insurance coverage may also cover the losses that your clients cause. Not sure how much insure you require, get a FREE Quote today!

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