How to Avoid Taking the Rap for Someone Else s Screw Ups!!

Transcription

1 CONTROLLING OUTSIDE RISKS: How to Avoid Taking the Rap for Someone Else s Screw Ups!! TRICO JIF Retreat July 26, 2018

2 Liability Issues 2

3 Risk Management... Beyond Safety Risk Avoidance Risk Control Risk Transfer Additional Insured status Indemnification and Hold Harmless Agreements Contract Review Facilities Special Events Contractors/ Vendors 3

4 Risk Transfer Techniques 1. Hold Harmless 2. Indemnification 3. Insurance Clause Coverage Limits Additional Insured Certificates of Insurance 4

5 Hold Harmless If someone gets hurt, and it s my fault, I won t let them drag you in! Contractor agrees to hold harmless municipality, its employees, agents, etc. from all liability associated with the acts of the contractor in connection with this job. 5

6 Indemnification If it s my fault, I ll pay on your behalf! Contractor agrees to defend municipality and pay on your behalf all sums you are legally obligated to pay as a result of negligent acts of the contractor. Hold Harmless and Indemnification agreement is usually combined in the same clause 6

7 Insurance Clause* 1. Contractor MUST carry insurance acceptable to the municipality for the duration of the job 2. Specify type of insurance - Workers Compensation - General Liability - Automobile - Other (Cyber, Environmental, Builders Risk, etc.) 3. Specify Insurance Limits 4. Require Additional Insured Status *Must be a separate clause Review with your Risk Management Consultant Refer to JIF Certificate of Insurance Guidelines Insurance Policy 7

8 Insurance Clause You shall maintain, or cause to be maintained, for not less than the duration of the contract between YOU and US, at least the following types and amounts of insurance for claims which may arise from or in connection with the contract, the premises, the performance of the work, the work, the products to be provided, etc. Insurance Clause 8

9 Insurance Clause Workers Compensation Workers Compensation insurance in compliance with appropriate federal and state laws, and Employers Liability Insurance with a limit of not less than $1,000,000* per accident or disease in the jurisdiction in which you operate. Insurance Clause *Consult with your Risk Management Consultant as respects appropriate limits 9

10 Insurance Clause General Liability Commercial General Liability Insurance, occurrence form, with limits of not less than $1,000,000* per occurrence and in the aggregate, naming Municipality as an Additional Insured. Insurance Clause *Consult with your Risk Management Consultant as respects appropriate limits 10

11 Insurance Clause Automobile Liability Auto Liability Insurance, including vehicles owned, hired, and non-owned, with a combined single limit of not less than $1,000,000* per accident. Insurance Clause *Consult with your Risk Management Consultant as respects appropriate limits 11

12 Insurance Clause Other Insurance Any other insurance* as may be reasonable and prudent in light of your operations Insurance Clause Cyber? Environmental Impairment Liability? *Consult with your Risk Management Consultant as respects appropriate coverage and limits 12

13 Belt and Suspenders If Indemnity Agreement is deemed void and unenforceable One can fall back on the Additional Insured status Belt Additional Insured Suspenders Indemnity Agreement 13

14 Certificates of Insurance 1. Evidence of coverage 2. Tells you what coverage WAS in effect on the day it was issued 3. DOES NOT give coverage! 4. DOES NOT give you rights! 5. Tricky cancellation clause Shall endeavor to notify you! Get it BEFORE the project begins! Send copies to your Risk Management Consultant for review and advice 14

15 Certificates of Insurance Check the expiration date(s) and diary for renewal certificate! Certificate of Insurance Send copies to your Risk Management Consultant for review and advice 15

16 Policy Endorsements Certificate of Insurance does not confer coverage* Obtain an endorsement to the contractor s policy naming you as an Additional Insured Your RMC can obtain for you Allow lead time Certificate Holder is simply proof of insurance, where as Additional Insured status gives coverage and rights under contractor's or vendor's (the "Name Insured s ) policy 16

17 We Need Your Help You are our first line of defense Plan ahead - build insurance specs into contracts Don t be afraid to ask questions Be prepared to play hard ball Cooperate with JIF Defense Team! 17

18 Use of Facilities* Outside organizations using your facilities MUST complete a Use of Facilities Agreement (sample posted to the JIF website) Spell out pertinent details Insurance coverage must be in effect Additional Insured status for most Copy of Homeowners policy *Special requirements when alcohol is served 18

19 Professionals (Solicitors, Auditors, Engineers, etc.) Have you read your professional contracts lately? Any professional providing a service to your municipality must indemnify and hold you harmless Must provide evidence of insurance Including Professional Liability Must add you as an Additional Insured where appropriate* * Professional liability policies are an exception 19

20 Contractors Depends on the work to be performed How much damage can they do? Put insurance requirements in bid Review the contract Don t allow work to commence before receiving all documentation 20

21 Special Events Management of Special Events - Available on the MEL website Communicate with all departments Have a strategic plan in place Those who fail to plan plan to fail! Execute contract with organizer(s), vendor(s) Hold Harmless, Indemnification, Insurance, etc. Use your Risk Management Consultant for assistance! 21

22 Does It Work? 22

23 Case Study #1 Player injured at Little League game Sitting in dugout and struck in the head by a foul ball It appears that the Township should be entitled to defense and indemnification by CNA which insures the Little League Association as the Township is an Additional Insured on that policy. Outside Sports Associations must carry their own liability insurance! 23

24 Case Study #2 Use of Facilities Plaintiff was attending event at insured s facility While exiting she tripped and fell over cable ramp Suffered spinal compression fractures, fractured humerus, and a fractured right orbital 24

25 Additional Facts An event was being held by an outside organization on the day of the accident The facility where the accident happened was identified in the Use of Facilities Agreement with the town A Certificate of Insurance was on file with town Town was named as an Additional Insured 25

26 Good News The Use of Facilities agreement required a complete indemnification and provided for a defense should a lawsuit be filed arising out of any and all event-related activity Additionally, the town obtained an endorsement identifying the town as an Additional Insured 26

27 What Happened Next? Defense Counsel filed a Motion to file a third party complaint against event organizers and their insurance companies The Motion was granted and they accepted tender of indemnification and agreed to provide a defense! 27

28 Case Study #3 Claimant participating in Road Racing Championship Bike went down in front of him There was roadkill on the road 28

29 Case #3 Cont d Claimant flipped over handlebars Alleges multiple injuries and quadriplegia Additional facts: Accident occurred on County road Claimant alleges failure to maintain and inspect road area Town had Hold Harmless with event organizer Special Event Application stated roads did not need to be closed Town had certificate of Insurance from USA Cycling 29

30 Case is in litigation Case #3 Cont d Although County Road and applicable immunities apply Defense could be expensive due to severity of injuries Hold Harmless and Additional Insured status will cut our costs 30

31 Case #4 Read the Fine Print! Insured employee driving leased vehicle Employee complained to lessor s mechanic that something didn t sound right Mechanic said not to worry Vehicle burst into flames Employee jumped out and was seriously hurt 31

32 Case #4 Read the Fine Print! Employee filed a WC claim Also filed suit against lessor for injuries Lessor demanded that we cover the suit Lessor shall not be liable for damage by reason of failure of the equipment to operate or faulty operation of the equipment. The Lessor shall not be held responsible for any direct or consequential damages or loss resulting from the operation or use of the product. 32

33 Case #4 Read the fine print! Why were we required to cover the lessor? Lessor is arguing that per the lease agreement they are not responsible. Will it work? Stay tuned! 33

34 Interlocal Agreements Don t forget to follow these guidelines when entering Interlocal Agreements. It is important to identify who is responsible for what before a problem occurs. Towns get into trouble when the agreement is informal with no clear language as to roles and responsibilities. Mutual Aid Equipment Sharing SWAT Teams CERT Teams 34

35 Interlocal Agreements Interlocal/mutual aid agreements are effective means to save taxpayer money The documents should set forth the role and responsibilities of each of the participating local governments It is essential that all T s are crossed and I s dotted before work begins 35

36 Interlocal Agreements Agreement should detail exact nature of service to be performed Establish who is responsible for services Set forth a monitoring and evaluation procedure, and Address potential liability issues and responsibility Certificates of Insurance Indemnification agreements Other entities involved? (I.E. State?) MEL Bulletin

37 TULIP Tenant User Liability Insurance Program Web based insurance purchase program for users of your municipal facilities $1 million of liability coverage automatically naming the municipality as an additional insured Existing program is still active for members previously registered Program is being redesigned and will be relaunched later this year 37

38 Certificate of Insurance Guidelines Currently available on the JIF Website Sample Indemnity language Sample Use of Facilities Agreement Need revision Final stages of updating Should be released early fall 38

39 Questions? 39