When insurance requirements do not specify current standard insurance industry terminology and forms of coverage it is at best difficult and at worst impossible to obtain the required coverage. This places the party agreeing to the insurance requirement in an untenable position, essentially in breach of the contract with little or no means to cure the breach. When this occurs, one of two things happens:
 

1. First, all is well until some very costly accident happens requiring everyone to actually read their insurance policies only to learn that the policies do not provide the coverage that was thought to be in place. This results in further complications, including coverage disputes and most likely lawsuits with the insurers and between the contracting parties. This is very time consuming and very expensive.

 

2. In the second case, a post contract negotiation process begins as the parties seek to compromise with each other and the insurer on the scope of insurance to be provided. This is very time consuming and very expensive.

These situations are basically avoidable if in the first place you follow proper risk transfer/risk shifting fundamentals when drafting insurance requirements.

When you see the descriptive terms listed below in requirements for insurance, consider the entire insurance portion of the agreement suspect. Such terms are violations of risk transfer/risk shifting fundamentals. They achieve little other than wasting time, causing disagreements, and lawsuits.

Liability Insurance Requirements:

• Comprehensive general liability insurance.
• Public liability insurance.
• Manufacturers and contractors /(M&C) liability insurance.
• Owners, landlords, and tenants (OL&T) liability insurance.
• Contractual liability insurance.
• Additional named insured.
• Co-insured.
• Cross-liability endorsement.
• Broad form comprehensive general liability (CGL) endorsement.
• Broad form property damage endorsement.
• Combined single limit (CSL).

Auto Insurance Requirements:

• Comprehensive auto liability insurance.
• Additional insured or co-insured status (other than for a lessor of a vehicle).
• Cross-liability endorsement.

Workers Compensation Requirements:

• Workmen’s compensation insurance.
• Borrowed servant endorsement.
• All states coverage/broad form all states coverage endorsement.

Property Insurance Requirements:

• Fire and extended coverage or extended coverage endorsement.
• Additional named insured.

 
If your insurance requirements contain any of these outdated and/or antiquated descriptive terms and you want help avoiding the disruptive and costly consequences described above call CRT Consulting, LLC (CRTC). CRTC has helped a number of railroads do so, and we can help you too.