GOT CERTS?
June 23rd, 2009While Certs breath mints supposedly offer social insurance of a kind, CERTS is also industry shorthand for an actual insurance product: CERTIFICATES OF ADDITIONAL INSURED.
So what is a CERT and why are they used?
CERTIFICATES OF ADDITIONAL INSURED are documents obtained by vendors such as art handlers which permit them to do work in many public and private buildings. They serve to assure the risk managers of the job site that the company coming onto their premises carries proper insurance on their crew and coverage for any damage that might be caused by that crew during the course of their work. Without proper CERTS in place, entry is denied to the vendor, so this is no minor detail.
What types of CERTS are involved?
Typically the building in question will ask for two types of CERTS: one which shows that the vendor has current Workman’s Compensation Insurance and one which shows proof of General Liability insurance and the amounts of that coverage. The CERTS in each case are issued by the vendor’s insurance carrier and name that specific building or location as a temporary ADDITIONAL INSURED under the terms of the vendor’s policy, for a specified date or date range. By obtaining this coverage the property owner is limiting their risk and essentially “piggy backing” on the vendor’s policy coverage.
So if FINE ART SHIPPING sends a crew into a condo lobby and one of our crew puts a nail into his thumb, the building is reassured that the worker is properly covered by our Worker’s Compensation policy and will make no claim against theirs. Similarly, if our truck backs into the dock and runs over a prized potted palm in the process, the claim will go to our Liability Insurance carrier and not to the building’s own insurer for recovery of costs.
Screening tool
In addition this is an expedient way for the property owner essentially to screen the credentials of companies. Many “one man and a van” art handlers and installers don’t have such policies and so cannot provide CERTS. We get many job referrals each year from such independent operators. It isn’t necessarily a matter of skills – many independent installers are professional and talented – but typically it takes a larger operation to maintain insurance coverages at the levels required by major major metropolitan properties.
What about individuals having work done at a home or office?
If you are a small business or residential customer, it is a good idea to inquire whether an art handler who will perform installation or other services at your location is properly insured. Short of requiring a CERT, you protect yourself from possible liability if a worker is injured at your location, or from a claim against your own liability insurance in the event your property is damaged by the vendor. Consider this: if a worker sustains a serious injury at your location, and his employer has no worker’s comp coverage, who will he or she look to for payment of potentially serious medical bills? They may well claim that some condition existing at your property contributed to the accident, and you will be forced at the very least to defend against this. You may have exposure simply for not checking that the employer had the legally required insurance for his crew.
Or if a vendor’s truck parked in your driveway loses its brakes and crashes through your pool house, a business without liability insurance will leave you only two choices: an expensive lawsuit against a company with unknown assets, or a claim under your own liability policy which may well raise your rates for the future.
So while a CERT does not offer a rating of that company’s skills, it does signify that the company is operating legally, is most likely solvent (paying their premiums!) and that they are considered insurable in the marketplace. From a risk manager’s point of view, this is as good as fresh donuts on a rainy Monday morning.
Betsy Dorfman
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