The answer is, “If the contract is large enough the integrator will sign it.”
Over the 12 years of our insurance program the contractual obligations that members’ customers are requiring have gotten ever more onerous, reaching the point that it is sometimes difficult to imagine circumstances where the integrator would not be liable! So, what are the insurance implications of signing such contracts — specifically loss related to your professional errors and omissions liability coverage?
First, you need to review your current policy to see if it contains a “contractual liability exclusion clause” If it does, then you need to understand the implications of such exclusion. What is its intent? Typically this is intended to exclude liability assumed under any express warranty, agreement, guarantee or the like, unless such liability would have attached anyway. So, before signing a contract, however large, you need to get your lawyer to review, and also get your insurance advisor to verify any insurance coverage implications of the contract.
Do all professional rrrors and omissions policies contain such exclusion? In fact they do not. The combined general and professional liability policy that is exclusively available to CSIA integrator members does not. Specifically, breach of contract is insured under the professional errors and omissions section of the policy. The coverage is “We agree to pay on your behalf all sums which you become legally obliged to pay (including liability for claimants’ costs and expenses) as a result of any claim by a client first made against you (regardless of who caused the claim) and notified to us during the period of the policy arising out of any breach of client contract.” There is one exclusion to this and that relates to liquidated damages.
In addition, the CSIA policy is extended by endorsement to include coverage, if required by contract, for ISO forms CG 20 37 10 01, CG 20 10 10 01 and CG 24 04 10 93.
Again, this enhanced policy form is only available to CSIA integrator members via the CSIA insurance program and our insurance agents at First Niagara Risk Management. It represents the broadest coverage available today.
As you may have heard, Key Bank and First Niagara are planning to join forces. The transaction is expected to close during the third quarter of 2016. Employees of FNRM tell me that they are excited to begin this strong partnership. The First Niagara Risk Management CSIA team looks forward to continuing to serve our membership!
For a no obligation review of your current policies, more information on this article or the CSIA insurance programs in general, please contact me, Paul Barnard, at paulbarnard@csia-insurance.com or 001-610-507-6595.