Insuring Your Risk in Master Service Agreements

Restoration companies need customized insurance to cover the risks associated with doing working assigned under master services agreements. It is necessary to understand how the liability flows between the restorer, the holder of the master services agreement and the property insurance company. Essentially, the restoration firm will always be responsible to pay for any damages caused by its operations or completed operations at the job site, and the restorer will pay for losses his work caused to other parties in the chain. However, one question is who the restorer will have to pay on a job gone bad: the property owner, the holder of the master services agreement or the property owner's insurance company. If there is a coverage gap in liability insurance coverage, the restorer will be the insurance company of last resort for all of the parties the restorer has indemnified. The most common coverage flaw in insurance policies sold to restorers working under master service agreements is with the Additional Insured endorsements. If the endorsements do not specifically say the holder of a master services agreement is an Additional Insured on the General Liability and Contractors Pollution liability insurance policies, the parties they agreed to indemnify will not have the benefit of the restorer's insurance coverage. Without insurance, the restorer will be the deep pocket that everyone looks to for payment of their losses. Restorers can perform a simple check by pulling out their policy to see if it has both CG 20 10 and CG 20 37 Additional Insured endorsements on the General Liability policy.

Read more.Restoration & Remediation (05/13/19) David J. Dybdahl