Recently, I came upon an interesting (albeit disturbing) example of how generic insurance obligation language in a contract left the Landlord without Additional Insured protection from their contractor.

In the case of Seven Up Realty vs AJ Greenwich Contracting, the contract that Seven Up had with Greenwich did not REQUIRE Greenwich 

There are industries that entail managing insurance compliance among large numbers of vendors/contractors, which challenges even the most organized firm to manage the compliance properly. If done right, it’s a process which requires diligence and specialized knowledge:

Situation

A NY-based organization (acting as tax syndicator) with over 350 properties engaged us to review and modify the lender requirements and to ensure insurance compliance with the requirements from the various parties involved in a deal

Errors and even outright fraud in certificates of insurance is a growing problem. We encounter a 70% noncompliance rate on initial documents.

The certificate of insurance compliance function protects a company by ensuring that its contractors have appropriate types and amounts of insurance coverage. The burden of this compliance process is often underestimated.

Monitoring insurance compliance in contracts is an important, albeit challenging, risk mitigation strategy. Read Al Sica’s recent article on the subject posted on Construction Executive Magazine website.