CSI Blogs about Insurance in Technology

Is your business dependent on suppliers?

The natural disaster in Japan has been devastating. It reminds us how quickly life can change. Even though U.S. businesses are not being physically impacted by the damage, there is still loss due to reliance on suppliers. It affects the global world.

It is impossible to be ready for everything; some things are uncontrollable but you can try to minimize risk. Loretta Worters, vice president of I.I.I makes this point,

“U.S. manufacturing plants could grind to a halt if essential supplies are not delivered on time, which could be devastating for American businesses. But insurance may be available to prevent financial catastrophe. Businesses need to talk with their commercial insurance agent or broker about the coverages that are right for them.”

Contingent Business Interruption (CBI) Insurance & Contingent Extra Expense Coverage

These coverages are ways to help manage risk and financial loss. These coverages can include:

• CBI covers loss that occurs far away from actual physical business properties
• Reimbursement of lost profits and extra expenses due to business interruption from supplier

You can usually cover a selection of suppliers or purchase blanket coverage for all. However, it is important to note that it excludes floods and earthquakes. Those must be added separately to the policy.

Interested in learning more? Contact us today at 877-500-6997.

Should you add Additional Insureds?

The entry below is featured in this month’s TechAssure Newsletter.

Contributed by Noel Bertman
Chubb Group of Insurance Companies

Risk managers, CFOs and CEOs are routinely asked by their clients to obtain additional insured status under their liability policies. Too often, this request is agreed to and passed through to the insurance company without thought of the consequences to your company.

Some points to consider before you act on the next request:

• Limits of Insurance
  Have all considerations been undertaken to ensure that you are not giving away the coverage you’ve purchased for your own defense?  Many insurance policies will defend and indemnify your client if you agreed to do so in a written contract. The money spent on defending your client could potentially be reducing your liability limits (in policies where defense expenses reduce the limits). By accepting only the liability for exposure within your control, you can retain the most value from the coverage for yourself. An example might be limiting status to financial interest only.
  
• Reporting
  Some policies have provisions that all insureds (includes additional insureds) have the duty to report claims in a timely manner to the insurance carrier. For example, can the additional insured prejudice my coverage by untimely reporting?
• Separation of Insured Provision
  If your policy contains this coverage, you may be allowing the additional insured (your client) to use your own policy to bring suit against you.
• Blanket Additional Insured Wording
  Most contracts require you to indemnify and hold your client harmless.  Many blanket additional insured provisions are very generic, and can apply to many different situations. 

Therefore, you need to make sure that the additional insured provision is tailored to comply with your contract. It is always best to review the additional insured provision and ask yourself, “Are there limitations in the policy regarding retention of defense counsel and control of a suit that require certain pre-loss agreement that is not in the contract?”