Working with Vendors
Do You Have a Written Agreement?
Be sure to solidify all vendor agreements in the form of a written agreement as verbal agreements lack documentation and can be misconstrued.
If you have a formal contract, it's important to have them reviewed by someone who is qualified and knows what to look for prior to signing. This may include a lawyer, a board member, a broker, or Redwoods. We welcome the opportunity to review contracts on behalf of our customers from an insurance and risk standpoint. If an insured has given you a contract for review, please reach out to your underwriter for assistance.
Is Your Insured Indemnified?
The most important term to look out for in third party contracts is "indemnity". We suggest that both parties indemnify each other for their own behavior. And especially that the vendor indemnifies your insured. This minimizes your insured's liability and may provide protection if they experience a loss while fulfilling the contract. Sample contract language might say:
"Vendor agrees to indemnify insured for costs or damages to insured arising from vendor's own negligence or bad acts."
Does a Certificate of Insurance Have You Covered?
It's also important to be listed as an Additional Insured under the contractor's insurance policy, in the case of an incident. Be sure to acquire their Certificate of Insurance as proof. Verify that the contractor's insurance policy meets Redwoods' minimum requirements:
- Minimum $1M per occurrence limits
- A.M. Best Rated A-, FSC VII insurance carrier