Any company that does business with the member should have General Liability (GL), Automobile Liability (AL) and Workers’ Compensation (WC) coverage at a minimum. Recommended Limits of Liability are:
$1,000,000 occurrence, $2,000,000 aggregate for premises/ operations
$1,000,000 occurrence, $2,000,000 aggregate for products/ completed operations
$500,000 combined single limit for bodily injury and property damage,
Hired and non-owned autos included
$500,000 per occurrence bodily injury,
$500,000 per occurrence bodily injury by disease,
$500,000 policy limit for bodily injury by disease
(These are Employer’s Liability limits and do not affect the payment of medical expenses or lost wages to injured employees.)
An “additional insured” endorsement naming the member should be added to the contractor or vendor’s General Liability and Automobile Liability policies.
A “waiver of subrogation” endorsement in favor of the member should be added to the contractor’s Workers’ Compensation, General Liability and Automobile Liability policies.
For long term contracts renewable on an annual basis or large construction projects we like to see an endorsement to all policies that will give the member at least 30-day notice if the contractor’s insurance is cancelled or non-renewed.
For particularly hazardous operations, large contracts and projects like a multi-million dollar treatment plant, pipeline or building higher liability limits should be requested. Double the limits of liability shown above and request an Umbrella Liability policy to add $1 to $5 million limits above all of the GL, AL and WC limits. Ask for even higher limits of liability if the project is over about $50,000,000 or there are significant exposures to large numbers of people concentrated in places like schools, hospitals or densely developed urban areas.
For small, ordinary, routine contracts with small companies or individuals, an exception for lower limits of liability can be made. This is a judgment call and should be carefully considered.
Yes, but be aware that the certificate does not confer any coverage on the member or guarantee conformity with your insurance requirements. Only the contractor’s insurance policies can do that. The certificate is usually an accurate reflection of the policies, but if there is any doubt the member should request copies of the policies.
It’s a very good idea to require it because it protects the contractor’s employees and would prevent them from trying to collect benefits from the member if they are injured on the job. In fact, Texas law requires contractors performing construction work for public entities like the member to carry workers’ compensation. However, sole proprietors, partners and executive officers are not required to cover themselves. If a certificate of insurance showing workers’ compensation coverage is not in your files, the Fund’s premium auditor will charge the member workers’ compensation contributions for the amount of the contract unless the payroll portion is broken out in your records.
The following lists various trades, services and professions and the additional coverages they should carry to protect the member, your customers and the public. All of them should carry the GL, AL and WC coverages and endorsements recommended above plus the coverages and special provisions shown here:
Any business that comes on member premises to perform work, repairs, maintenance or services should have the coverages and limits of liability described in #1 above. This includes janitorial services, landscaping, air conditioning, electricians, plumbers, painters, caterers and security firms.
Large construction projects definitely call for higher limits of liability as described in question #3. The GL of the contractor should be endorsed to provide “per project aggregate limits” so that large claims on their other projects do not exhaust the limits of liability that protect the member on its project. Another common coverage provided by general contractors is Builder’s Risk. This policy provides “all risk” type coverage for the value of a building or plant as it is being constructed. If a $10,000,000 building is 50% complete and it is destroyed, the Builder’s Risk coverage would pay for the value of the building at that point. The policy should also cover building materials in storage or in transit before the materials have been used in the construction. The contractor should also maintain their “completed operations” coverage in place for at least two years after the completion of the project. Completed operations coverage is part of the GL policy.