Mistakes can happen. It’s a simple fact of life and a simple fact of doing business. That’s why issues of insurance are so important for condominium managers and boards. While it is easy enough to keep up to date on one’s own insurance, making sure the coverage of outside vendors and contractors is in order can be tricky. We all want to believe that our landscapers or snow removal teams or siding contractors are protected by insurance in the event of an accident, but it’s not always easy to be sure. And if coverage is not in place, that’s the kind of mistake that can lead to million-dollar problems for an association.
As with anything, good planning and due diligence can prevent those mistakes before they start. Knowing what to look for and what questions to ask when it comes to insurance and vendors can ensure a smooth – and liability-friendly – working relationship.
That diligence should start at the beginning. “You should not accept [an insurance]certificate that is handed to you by the contractor, because they can falsify those,” says Ann Hickman, a senior research analyst and editor of Construction Risk Management at the International Risk Management Institute, Inc., in Dallas, Texas. “What you should do is require to have it be sent to you from their insurance agent and have your name on it as a certificate holder. The agent who signs it is testifying these coverages are in force, as of the date that it’s issued,” she says.
“At at minimum,” says Hickman, “the certificate should verify that they have general liability and worker’s compensation insurance.”
Once making sure the contractor has coverage, it’s important to check and recheck coverage. Just because a contractor has proper coverage when the paperwork is first signed does not mean that it still will be in place six months or six years down the road. Especially in today’s economy when so many businesses, both large and small, are cutting corners or coming up shorton monthly bills, the possibility of a policy lapse by an otherwise reputable vendor is all too real. “I would make sure that you instruct the (insurance) agent or broker that you are to be advised if the insurance is canceled or lapses,” says Joel Meskin, CIRMS, of Ohio-based McGowan & Company.