'Scoop' Out These Four Endorsement Requests
Endorsements can impact the payment of claims on behalf of a client through your insurance program, as well as the ability of your insurance carrier to recover claim payments from a negligent client on your behalf. Ultimately, this affects your loss history and future premium costs.
Therefore, i'ts important to understand the protections being extended by endorsements.
Four Popular FlavorsAdditional Insured Status: Adds an entity as an insured under your liability coverage. Depending on the specific endorsement utilized, your policy may respond on the additional insureds behalf to liability suits made against them for damages to a third party arising out of either your sole negligence, your joint negligence with the additional insured, and/or the additional insureds sole negligence. Coverage can be applicable to damages arising out of your ongoing operations, completed operations, or both, based on the specific version of Additional Insured endorsement utilized.
Primary & Non-Contributory Basis (for Additional Insureds): Specifies in the event that both the Additional Insureds liability policy and your liability policy would respond to a claim made against the Additional Insured on their behalf, your policy will respond on a primary and non-contributory basis. This means your policy would pay for defense costs and damages prior to any payment made by the Additional Insureds policy without seeking any contribution from the Additional Insureds policy.
Waiver of Subrogation: When your insurance carrier pays for a loss on your behalf, your subrogation rights (your right to recover funds paid for a loss from another party that may be legally liable for the loss) transfer to the insurance carrier. They may now attempt to recover funds from any negligent third party through subrogation. A Waiver of Subrogation endorsement waives the carriers right to recover these funds from any entity for which they have provided this endorsement.
Alternate Employer Status: Adds an entity as an alternate employer to a workers' compensation policy, providing clients with primary workers' compensation and employers liability coverage as if it were an insured under your policy. Coverage is only provided on behalf of the Alternate Employer for bodily injury sustained by your employees in the course of special or temporary employment by the Alternate Employer.
Rocky Road (A Common Endorsement Scenario)Your temporary employee is injured while performing a clients job duty. Your client's negligent actions contributed to your employee becoming injured. You have a Waiver of Subrogation endorsement on the workers' compensation policy in your client's favor. Your workers' compensation pays for the injury sustained by the employee. Your insurance carrier is unable to recover any amount of the claim paid from your client, despite their negligence, as they have previously waived their right to subrogation against the client on your behalf. The cost of the claim is included on your loss history and experience modification, despite your clients liability regarding the injury.
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