How does a policyholder enforce a contract in which one party assumes the risk of another? Let's break it down two ways: By additional insured (AI) endorsement. AI is an insured. Insurer owes AI fiduciary duties. AI must follow policy terms for coverage. AI does not need to have a written contract with Named Insured for coverage to apply. In most states, AI coverage will include negligent acts of AI in addition to [...]
The best way to protect a client from legal liability and to transfer risk to another company is the belt and braces approach. A "belt" is a well crafted indemnity clause where one party (indemnitor) promises to hold the other (indemnitee) harmless for any and all losses arising out of, or connected to, the indemnitor's work. An example is when a sub-contractor promises to hold a contractor harmless for loss or damages which occur when [...]
There are three essential steps to railroad risk transference through insurance: 1. Add an indemnity clause to all contracts making clear that you are asking for indemnity for the contractor's or vendor's negligence. If you do intend to seek indemnity for the railroad's negligence too, this language needs to be clear and unequivocal in order to adhere to most states' requirements. Not all states allow exculpatory indemnity. (I will write more about this later. [...]
Railroad risk transference through insurance can be accomplished several ways. First, the vendor can purchase standard Commercial General Liability (CGL) coverage. Most policies are written with standard forms which were drafted by insurance advisory organizations. These forms contain uniform language used by most all insurance companies. This is why they are called “standard” forms. The standard CGL form contains a broad provision which does not provide insurance coverage for [...]
Risk transference is ubiquitous in the railroad industry. Railroad losses traditionally can be catastrophic and expensive. Most railroads are self insured by using a captive. Once this self insurance is exhausted, the Class I railroads will have a very high self insured retention that does not kick in until losses exceed the multi millions. For this reason a railroad will transfer, a potential risk for future ability onto a contractor [...]
