USI evaluates the effectiveness of your existing insurance program against liabilities your company assumes under contract.
Identify Opportunities for 3rd-Party Risk Transfer

A manufacturer with a large showroom and distribution complex hired a contractor to remove snow and ice. The contract required the snow removal company to carry general liability insurance.

During the winter, a customer fell on ice on the manufacturer’s property. The customer sued the manufacturer, who tendered the claim to the contractor for defense. The contractor’s insurance carrier denied the claim, noting that there was no defense or indemnification provision in the contract. The manufacturer had no alternative but to submit a claim under its own policy, which had a $100,000 deductible, resulting in out-of-pocket costs.

Upon partnering with the manufacturer, USI conducted a thorough review and required the contractor to name the manufacturer as an additional insured on a primary and non-contributory basis under their general liability policy. The contract language was also revised to include an indemnification/hold harmless provision specifically outlining the requirements for the contractor. The resulting financial impact for the owner was equal to the $100,000 deductible and transfer of future liabilities to the contractor, up to the policy limit.

Mitigating Contractual Exposures

A prospective client was looking to rent a warehousing facility. The lease required the client to hold the landlord harmless from all liabilities related to hazardous substances, with limits of $25 million.

The client didn’t feel that the $25 million limit was warranted, nor did they want to incur the additional $100,000 premium. Dissatisfied with their current broker, the client approached USI for a solution to the problem.

USI completed a comprehensive risk assessment, analytics and benchmarking, demonstrating to the landlord that liability exposure was minimal. We successfully negotiated lower limits in the contract, resulting in a premium savings of $75,000 and compliance with the lease agreement.

Eliminate Coverage Gaps/Prevent Uncovered Loss

A manufacturer was looking to enter into a supplier agreement with a customer that required the manufacturer to protect and indemnify the customer from any loss arising out of bodily injury, property damage, and any other damages or loss related to product failure, design and/or installation error.

The manufacturer’s General Liability policy only provided coverage for claims arising out of bodily injury and property damage.

USI advised and facilitated the purchase of a separate manufacturer’s Errors and Omissions policy for $12,500 additional premium to address other damages or non-bodily injury and property damage claims, such as third-party financial loss. This prevented a potential breach of contract and an uncovered E&O claim up to the policy limit of $1 million.

  • Protects against underinsured or uninsured losses that could otherwise be covered
  • Promotes and supports contractual compliance
  • Mitigates unreasonable insurance requirements in contracts

Like insurance policies, no two contracts are alike, frequently resulting in misalignment of exposure and coverage.

Additional insurance needs are often overlooked when assuming risk under contract, resulting in coverage gaps. Contractual obligations are frequently accepted without consideration of alternative transfer methods, terms, or available coverage.

USI conducts a comprehensive review focused on risk transfer options, preferred contract language, and alignment of coverage with your retained risks. This allows for informed risk management decisions when transferring, assuming and protecting against third-party liabilities. It also ensures compliance with third-party contractual obligations, as well as protects against uncovered losses up to the policy limit and/or the value of the contract.

We begin by reviewing our clients’ contracts to determine which risks can be transferred to a third party. We then partner with the client and their attorney to establish the most favorable contract language for all retained and assumed risks. Finally, we evaluate our clients’ aggregate contract exposures and current insurance policies and align the coverage to protect their contractual obligations.