Have Your Insurance Carrier Review Contractors' Certificate of Insurance
Nov. 27, 2012 — A cooperative retained a contractor to perform interior renovations. During the course of the project one of the shareholders claimed to have been made sick as a result of purportedly noxious fumes created by the work. The co-op board filed a claim with its general liability carrier who, in turn, requested to see the contractor's certificate of insurance. That's when the trouble started.
After reviewing that certificate of insurance, the cooperative's insurer raised a concern regarding whether the contractor's insurance excluded coverage for certain labor law claims and demanded that the cooperative immediately pull the contractor off the job site until the insurer could review the endorsements to the contractor's policy.
The co-op board stopped the project until the insurance issue was resolved. It turned out that the contractor's policy was not objectionable, but the co-op found itself faced with a claim by the contractor for thousands of dollars in losses purportedly incurred as a result of the job being temporarily stopped.
Legal Lesson
The lesson here is that before entering into any construction contracts, the co-op or condo board should have its insurance brokers review a copy of the contractor's certificate of insurance to obtain confirmation that the limits of liability, the contractor's insurers and the scope of insurance are commercially reasonable and do not conflict with any provisions of your liability insurance.
Robert J. Braverman is a partner at Braverman & Associates / Braverman Greenspun.
Photo by Carol Ott
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