A recent change in a common risk-management activity poses new risks to your firm and its bottom line. Although the change may represent just more paperwork to some, new language in standard insurance forms regarding notices of termination affects all of construction. It's important, and it could cost you big money, no matter what kind of company you operate.
Construction contracts often contain a provision that requires a contractor working on behalf of another contractor or an owner to hold harmless and indemnify the other parties—that is, the contractor or owner. To assure sufficient assets are available to back an indemnity, it is common for the general contractor or owner to contractually require the subcontractor to provide a certificate of insurance. That certificate provides evidence the subcontractor has appropriate insurance coverage.