COI Received Doesn’t Mean Covered: Hidden Gaps That Surface During Claims

Jessica: Hello again, everyone. Welcome and thank you for joining us today. My name is Jessica Lopes. I lead business operations here at Jones, which includes our auditing team, the people who review every certificate of insurance, every insurance document that comes through our platform. I’ve spent the last five years looking at what’s actually behind COIs, and I can tell you it’s very exciting. Today’s session is called COI Received Doesn’t Mean Covered: The Hidden Gaps That Surface During Claims. The reason we chose that title is because for a lot of teams, when they receive a COI, it’s the finish line. The certificate came in, the dates look right, the limits look right, the box is checked, the coverage is applied. But that’s not the reality, and we want to talk about how that moment of confidence can be exactly when you’re most exposed. And I could not have a better person to explain all this and explore the subject with you than Alison Christian, who is with Meritage Homes. She has spent almost 20 years working in insurance, she’s seen it from every single angle, and she’s going to bring the real world view to this conversation while I add the auditing view, the perspective of the audit side. So, Alison, welcome. How are you doing? How’s the Arizona weather treating you?

Alison: It’s wonderful. We’re in a cool spell today, it’s only 108, so I have my jacket on. But we will survive, don’t worry.

Jessica: Amazing. Tell the audience more about your experience. Please introduce yourself.

Alison: I will. It doesn’t feel like it, but I’ve spent two decades in insurance. It’s been my entire background as an attorney. I’ve gotten to dive into all different types of policies, manuscript forms, ISO forms, in states all over the country, with all different types of risks and all different types of carriers providing the paper. I like to tell people that insurance makes the world go round, because without it you wouldn’t be able to start your business, or visit places and have the GL protection, or drive your car and have the auto protection, or go to work and know that you’re safe with workers comp. It’s an aspect that touches each of our lives in a way that helps it go around. And the claims that insurance sees are each unique, so there’s never a dull moment in insurance. As I’m sure each of you who touches this area can appreciate, no two claims are the same, and you get to learn a lot about individuals and their experiences and what can happen when coverage is not in place, both the corporate side of it and the personal side of it. So I have really enjoyed it. In my present role, one of the things I do is manage all of the insurance for Meritage Homes, and the compliance for thousands and thousands of vendors that we work with all throughout the country. It’s an exciting role to be in. Risk transfer is part of Meritage’s business. Because we sub out 100% of our work, effective risk transfer is how we’re able to protect Meritage. And that really only matters, practically, if you have the coverage in place. That’s obviously what we’re here to talk about today: the COI is not itself coverage, and there’s a lot that can happen behind the scenes. It’s an exciting topic, I’m a total insurance nerd, so thank you to Jessica and the Jones team for having me here to talk about it.

Jessica: Absolutely. Well said, and thank you, Alison, for joining us. I do want to drop a quick note for everyone watching that you can leave your questions in the chat, and we will be addressing them at the end. So we’re going to dive right in. Alison, take us back to before you had a system around COI review. What did COI review look like day-to-day? Who was doing it? Where did it live, basically, before Jones?

Alison: Before Jones, and even prior to the vendor that we had before Jones, it was manual. And I think there are still a lot of companies that do a manual review, which means that you have a person going out and having to obtain, from the vendors or their agents, certificates evidencing the insurance, and then somehow manually keeping track of not only the data around that insurance, so policy number, effective dates, limits, but then maintaining and managing renewals, and looking at and obtaining schedules of forms and endorsements. At a smaller operation, perhaps that’s something that’s manageable, but as soon as a business starts to scale, taking it outside of that manual process is really crucial, if not imperative. We had a vendor helping Meritage prior to Jones that would help us obtain the COI and the schedule of forms and endorsements, which is sometimes referred to as the SOE. But then it would turn over to our team to become a manual review of that SOE, to identify, only by name, certain exclusions and forms that made up that policy, and then to go back as an individual and request copies of those forms and endorsements so that we could manually review them for terms that were problematic for the coverage we were expecting. That is a very intensive process that takes up a lot of time, not just in the corresponding back and forth between the agent and the insured and Meritage to get all of the documentation, but then the individuals who are reviewing the policy are humans, and humans can only do so much. So that also takes time. As you start to scale any business toward size, and as you start to move the velocity of your business toward speed, you have to start to consider additional partnerships and tools that are going to help you do that review faster. That’s how we ended up coming over to Jones, in a search to be able to perform the compliance review not only much more thoroughly, but faster. That technology advantage is something that I’ve really enjoyed and have seen the benefits of already.

Jessica: Amazing. I do have follow-up questions, Alison. First of all, who was reviewing, who was actually making the decision on whether the certificate was good? I know you have a team under you, so I’m wondering if all of them were insurance people, or PMs, or coordinators. Did everybody have the actual insurance knowledge that’s required?

Alison: The person who was doing it before is somebody I still work very closely with. Her title is insurance manager, but her background was not necessarily in insurance, she was a paralegal by training. So she did have that legal understanding of the complexity of documents that have legal significance, and an insurance policy is one such document, so is a COI. She was somebody who was able to take that basic understanding of interpreting a legal contract and then layer onto that learning about insurance. One of the things she had done was dedicate herself to outside training, individual workshops, and learning more about an industry that was obviously not her first and was not common to her. And then one of the reasons I came over to Meritage was my insurance background. They were really interested in having somebody who had that strength in interpreting the policy forms and understanding coverage, and being able to communicate it in a way that was really understandable to lay people and everyday people. Because when you get into insurance language, sometimes it can sound like you’re a lawyer, and that’s not always the easiest way to do something for business. Starting to have someone who can not only digest the complexity of the concepts but then communicate them in a way that your insureds and your vendors would understand is what Meritage wanted when they brought me over. It’s something that I’ve been working really hard to teach my team, in everyday terms: what does this insurance mean? What kind of a risk is it either accepting as the carrier, or excluding and putting back on the vendor to bear alone? It’s been a really educational process to have somebody with my experience level come over to the team to teach them about insurance coverage and what these terms mean: the difference between an exclusion, and then an exception to an exclusion, and a grant of coverage through an endorsement, and an extension of coverage through an enhancement, perhaps. Understanding all of those terms took me decades, so it’s an area that I love being able to share and bring knowledge to the team.

Jessica: Everything you’re saying resonates with me so much, because we see this everywhere: a lot of teams are not actually insurance experts. They’re project managers, they’re coordinators, they have another actual job, and somebody just came in and added insurance as part of it. So it’s not easy. But also, having a very large team of auditors here at Jones, we see how dynamic it is. We have weekly meetings to this day, it’s been five years of weekly meetings, and we do not run out of topics to talk about when it comes to insurance. It definitely requires a lot of effort and coordination with the team to make sure everybody’s aligned. That makes perfect sense, and I would love to get into it more. The title of the whole webinar is received doesn’t mean covered, so I would love to hear your concerns about this, and also when this first became real to you. Any stories you might have about COIs that passed the eyeball test but did not hold up later?

Alison: I love that when you and I were getting ready for this, you talked about the term false confidence. I think that is such an important concept when you think about what people believe they have when they hang on to a COI. I’ve got four points that I want to share with this team, for what I consider to be very high-risk blind spots that will be absent on a COI but are really important for a team to be reviewing or capturing on the back end. And it starts when you look at the ACORD form that the COI comes on. It actually says that this does not confer coverage. This document cannot contradict the policy and does not confer coverage. So it is merely evidence, probably manually entered by somebody, of what exists in a policy, and that policy is the document that governs the rights and the duties and the obligations. That certificate does not do anything for you, really. You can’t walk into a court and say, look, I have the certificate and therefore I have the coverage. You can’t attach it as evidence of insurance protection. It’s just a reflection of what might exist on a policy, and you’re hoping it’s accurate. So that’s a good step: just never trust that ACORD form, and heed the wording that is on it itself.

Alison: Some of the areas that you will notice, and that I’ve helped bring the team awareness around, start at the beginning. One of the first data pieces you’re going to see on that COI is the named insured, and that can be misleading. It is very important for people who are looking at COIs to first start with the identity of the named insured, because you’re going to need to check: one, is this who I thought it was going to be? Is this who I am contracting with? Is this who my business relationship is with? And if it’s not, what is that entity’s relationship to my business, and why are they on here? We see this a lot when you have a master policy, for example. You’d see a really large enterprise, someone who has operations nationally if not globally, and they have these master policies, but the name on that policy may not be the person you’re trying to get coverage with. So the first place I always like to start is diving in and understanding the relationship of the named insured to my transaction and making sure those dots connect. If it is a master policy, you’re going to want to request the named insured endorsement, the broad form named insured endorsement, understanding: okay, if it is a master policy, I need to see with my own eyes that this subsidiary or this affiliate or this holding company is actually covered. I can’t just take your word for it. So even though it says named insured on the certificate, you do want to make sure you’ve seen a declarations page or a named insured endorsement page somewhere that confirms the entity you need coverage from actually has coverage under the policy.

Alison: The next gap you’re going to see on a COI: there’s usually a spot that will say deductible, but there is not a spot that will say SIR. An SIR is a self-insured retention, and that self-insured retention is really significant when you’re an enterprise that’s looking to risk transfer, because what it means is that’s an amount the entity listed on that COI has chosen to hold on to, as a risk that it’s going to become the insurer for. It is not typically disclosed on a COI. What you would see instead is deductible. So one of the big gaps I would really recommend people look for when they’re trying to protect insurance compliance is getting a copy of that deductible endorsement, if there is a deductible identified, so that you can confirm how it is being applied. Not just that it’s there and the amount of it, but how it is being applied. Is it per claim, per occurrence? Is there an aggregate? Is it a per project deductible? All of these things will matter when a claim does finally arise. And we have learned, and I know Jones has been a big part of this journey with us, that because the COI does not ask for disclosure of an SIR, it is something that teams themselves have to go investigate. I am a huge proponent of always asking, in this transaction when you’re getting the COI, to also get a copy of any SIR endorsement so that you can read that language. There are some that are ISO based, and ISO is Insurance Services Office, those are the more formal official terms, but there are others that are manuscript forms, meaning the carrier has come up with the form itself. You can never just assume that if you’ve seen an SIR or a deductible disclosed, that’s the end of the story. What you’re going to want to investigate further is: does that SIR apply to create a gap in coverage if it’s not fulfilled? For example, if it’s an SIR of $500,000 but the policy limit is a million, does that mean that if the named insured doesn’t pay 500, the insurer picks up at 500,001? Or does it mean that if it’s not fulfilled, the insurer pays nothing, and it’s essentially a condition precedent to even accessing the rest of that million dollars in coverage? Those are all terms that are part of the contract, and when you’re getting a COI, you’re not a party to that contract, so you would need to see what they’ve negotiated in order to understand it.

Alison: And then for somebody who’s sitting in my shoes, as the enterprise risk advisor, you need to communicate back to the enterprise: this entity has a million dollar SIR, or a five million dollar SIR, or something significant, because that really does change the relationship between the parties if and when there’s a claim. You can take entities who are partners in a business, with ongoing operations all over the country and multiple projects underway, and if there’s a claim that’s going to impact that coverage, that business partner becomes your insurer. There’s an adversarial element that enters that business relationship. I think that’s important to understand when you’re advising an enterprise on risk: that is going to change the dynamic of the relationship. That vendor could be able to say, oh, I don’t want to accept coverage, I don’t want to pay for your defense, you’re going to be on your own, and I can leverage the fact that I’ve got all these contracts lined up to keep doing work with you to get you to go away. The difference between an SIR, and that adversarial relationship with your vendor, versus it being with an insurance company who you don’t have a relationship with, is really important to consider. And that’s an absence on the current ACORD form. It’s something we look for a lot, and since moving over to Jones we’ve really gotten to see disclosure of a lot of SIRs that the business did not know we had out there. Sometimes you can reach an agreement on lowering that, for Meritage projects, or for a certain location or a state. So it’s an important conversation to have as business goes forward.

Alison: The last gap that I see a lot on COIs that’s really important: there’s usually a space to write in additional comments, and what people like to say in there is something to catch their AI coverage, the additional insured status. They’ll try to write in there that, you know, Meritage Homes and its subsidiaries and affiliates are additional insureds on this policy. And you, as the person looking at that COI, have to recognize that doesn’t mean anything. That does not mean that your company is automatically an additional insured, and it doesn’t mean that there’s a specific endorsement that has your entity named. That description on the COI was just put in by an agent, probably because the client said, hey, I have this contract, the contract says this. So that is just an agent reviewing what a contract requires and putting it on a COI. Again, going back to that admonition: it is not evidence of coverage, so don’t just trust that description. What most insurance policies have for that additional insured coverage is something called a blanket endorsement. The blanket will only capture AI coverage, ordinarily for ongoing and completed operations, that’s what you want to see it for, but it’s only going to catch it if you have a written agreement with the named insured requiring that entity to have the AI coverage. So you need to understand, if that’s what the policy requires, a written agreement with the named insured, you need to go back and make sure that’s what your paperwork is going to give you the right to. That’s going back to look at the contract that underlies the COI and making sure: okay, who am I contracting with? Do I have a written contract with the entity that I need to contract with, to catch the blanket? Do I have the ongoing operations and the completed operations, or are those separate forms? You see them more regularly included in a single extension or an enhancement that has both forms of AI, but there are those that still exist in separate forms for completed and ongoing, and so you may only catch one. And understanding what the written contract needs to require: it’ll say it’s primary and non-contributory if required by contract. Okay, well, what does the contract say about that? Those are the types of things where you really have to question what you see in the description of what the AI is, and go back and verify that both the policy and the contract line up to give you what you really need.

Alison: And I think the last point kind of ties into this: you see the certificate holder on the bottom, and that is also not always evidence of who really is covered. The certificate holder just means that you’ve got a copy of the COI. It doesn’t give you any particular rights or benefits under the policy. It just means you’re getting a physical copy of the COI, for whatever reason. So entities, and people sitting in my shoes, and anyone who’s looking into insurance vendor compliance, really need to appreciate the limitations that are on that COI document, and see how important it is to get full policies, or full copies of all of the SOE, to take a look and dive into what those provisions really say.

Jessica: Alison, perfect. I love how you pointed to things that we see every day here at Jones. And I’m also delighted that we haven’t even started to talk about exclusions. You’ve mentioned collecting the declarations, the schedule of forms, but everything we’re talking about here is just the basic requirements we’re asking for and looking at on the COI, and they already present so much risk. We’re not even talking about when, for any reason, a vendor has a residential exclusion when the only work they’re doing for you is residential. And it’s so interesting for me to hear your experience with the blanket endorsements. We’re having more and more of these conversations with customers about how some endorsements, and we’ve built a huge endorsement index at Jones, include that contractual privity language where upstream parties are excluded: if you have not actually signed the contract with the subcontractor, you’re not covered. And you’re not seeing any of that if the only way you’re tracking additional insureds is the description of operations box on a COI. You definitely need to collect the endorsements themselves. And I cannot tell you how often we see schedule endorsements with the schedule box just empty, which means you don’t know who’s getting coverage at all: you did not name the specific entities, you did not include some type of blanket language. So it’s so interesting to talk about this, because I think this goes over people’s heads. They do not realize, on the simple topics, like the certificate holder not giving you any type of access to the benefits, or the additional insureds being listed on the COI meaning absolutely nothing unless you’re actually looking at the endorsement itself. And you also brought the point of ongoing and completed work: sometimes you have been listed in the schedule box of an ongoing endorsement, but most of these claims are going to come up after the work has been completed, and then you’re not covered at all. That’s when you cease to be an additional insured on that subcontractor’s policy. So all of that is quite interesting. I would love to hear more about the process you established, because I know the process you have on your account, and I think it’s one of the best ones we’ve seen. We give it as an example. And I would love to hear you explain more how you’ve been using the schedule of forms to try to catch the exclusions as well, and how you might have everything we’ve described, everything might look perfect, and then one single exclusion can throw everything to waste. Tell us more about exclusions, please.

Alison: I like to start the conversation where we did and then move into exclusions, because in the law, that’s where it starts. The person or entity seeking coverage first has the burden to bring the claim within the insuring clause, and that’s the place where you find coverage. That is on the additional insured or the named insured to come forward. So establishing your right to that coverage is just the beginning, and that’s what everything I just talked about will get you: establishing that you’re allowed in the insuring clause in the first place. Because once that is done, the burden shifts. Under the law, the burden then shifts to the insurance company to prove application of an exclusion to a certain loss. As the burden shifts, you want to be proactively aware, as a risk manager or an insurance manager, of what arguments an insurance company might make to come forward and say: great, I’m so glad you brought this claim to us, sorry, it’s actually excluded.

Alison: It has gotten increasingly difficult to stay ahead of where the exclusions are. You mentioned there’s a library of forms and a bank of forms, and the industry will evolve faster than the forms can keep up. When you see these manuscript endorsements, they may catch something that is not in anybody’s bank, and it’s saying the same thing. They’re just finding a way to get around the review, and it’s becoming this blind spot. So one of the things that I did when we moved our compliance over to Jones, because I love the technology-forward thinking in Jones, utilizing technology and AI to our advantage for efficiency and to catch details that a human eye reading pages and pages of insurance might miss, is we have shifted to requesting entire copies of policies, complete copies of policies, on certain vendors within certain risk profiles for Meritage, because of this issue with the exclusions. What we’ve been able to do then is feed into the review process not just certain forms, but the substance of what we’re concerned about. If you see terms like bodily injury to contractors exclusions, subcontractor injury exclusions, residential tract home, subsidence exclusions: the substance is something that you’re then able to communicate. That’s the risk I’m trying to protect, and I need to catch if that policy has something in there that is going to take that away from me.

Alison: The biggest ones we have been facing recently are this bodily injury to contractors. It’s an expansion of the employer’s liability exclusion that is standard in the ISO GL form. That employer’s liability exclusion is out there so that, technically, everybody would expect that you’re not going to have GL coverage if your own employee is injured; that’s the function of workers comp. So that is a natural, expected exclusion: somebody’s own employees are not going to have coverage under a GL because they should be covered under comp. Now, what the carriers have done to expand on that exclusion is to say: not only am I not going to cover your employees, but I’m not going to cover injury to any employee, period, or to any subcontractor, period, or to anybody working on your job site, period. It has become an incredibly broad way to exclude injury claims, in a manner that would be missed on a cursory review, because they would think it is just an employer’s liability exclusion, which is expected and usual. But it’s the language in that form that really is problematic, and that’s what people need to be capturing. To see that in an SOE, and to be able to catch it inside the entire policy, is something that we’ve loved the utilization of Jones and the technology for, because it finds it. Even if it’s hiding, it finds it.

Alison: And this is, without talking about any specific claims that are ongoing or open: it is not uncommon, after a significant injury claim, for one of the first questions from the business to be, hey, we have coverage for this, right? If somebody gets hurt at your business, or your business hurts somebody, the question is going to come back to you: where’s the insurance for this? Those types of injury claims can sometimes be ones with significant damages. So understanding where do I find that coverage, and are the carriers trying to find creative ways to get around that coverage for those big risks, has been very, very important. And what you do then, when we find it, because we have found these exclusions a lot recently, as your team knows, is it’s an educational process. Not just educating my team and the business team, watch for this, but also educating the vendors we’re working with and the insureds we’re working with: please understand, this is where you do not have coverage, and I don’t know that you know that. But if you don’t have coverage for it as an insured, I don’t have coverage for it as an additional insured, and that’s a problem for me. Having those conversations with the agents, to then go back to the carriers, is an important part of the discussion, and it has to happen before the claim.

Alison: You can’t wait and try to fix these problems after the claim, because that claim is going to be looked at as a snapshot in time of what was the coverage in place at the moment that person got hurt, or the moment the building collapsed, or the fire started. You cannot go back retroactively and find these issues and fix them. That proactive approach to looking at the coverage is so critical to making sure your ducks are going to be in a row in the moment of chaos, when there is a claim and it is significant. You don’t want to be having somebody say to you, hey, did you know they’ve got this exclusion? And that’s happened. It happens. Especially when you see the tail for construction defect claims, which can be up to 10 years in some states. You’re going back to look at policies that were maybe negotiated or in place prior to somebody with 20 years of insurance experience and Jones’s technological advances being able to help with the policy. That claim that is now going to trigger a 2020 policy or a 2019 policy is going to have a form on it that maybe somebody else didn’t catch, and that’s going to be a problem, because you cannot go back in time and fix it. So that’s why it’s really critically important to look proactively at the risk you’re trying to transfer, to make sure that transfer has happened effectively.

Alison: And then also just educating the partners you’re doing business with about where they have exposure. We really do hear often, especially since making the Jones transition, going back to our vendors and saying, hey, did you know, by the way, you’ve got this huge SIR, and it’s per claim, per occurrence, and you don’t have coverage for tract home, or the subsidence exclusions, and if it’s in any way kind of maybe sort of probably related to dirt, you’re not going to have coverage. Helping educate them, they then value that in us as well, to say, we didn’t realize that was happening. We’ve seen them actually move carriers because of it, and say, we appreciate you bringing that to our attention. Because it’s easy to lose. Insurance policies are dense, they’re long, and they’re very complex, and they work together like a puzzle. You can have those puzzle pieces and feel like you’ve got a puzzle that looks really good, when you look at the declarations page or the CGL page, and not realize that those exclusions take pieces of the puzzle away. If you were to ever have a claim that fell into one of those missing puzzle pieces, you’re going to feel awful about it if it’s your job to be watching these risks.

Alison: It’s different for every business. I can’t say that everyone has to be looking for residential tract home exclusions, or subsidence exclusions, or townhome development exclusions, or condo conversion exclusions. It depends on your business, and it depends on what you’re doing and what you really need protection for. But it’s important to understand whatever is out there. If it’s a landlord-tenant issue, okay, are there exclusions for tenants that had a certain credit rating, or exclusions for a certain number of short-term rentals in the area not being entitled to coverage? Or if it is a short-term rental, actually it turns out we don’t cover that. Or you’re driving an Uber and your insurance policy doesn’t know that you’re driving for Uber. Whatever the risk is that is important to you to transfer, I think understanding what the industry is doing with forms that could impact that, and then partnering with somebody like Jones to help you really dig in and figure out what is behind the declarations page and behind the SOE and behind the COI, to figure out: when a claim comes, what is going to be on my plate?

Jessica: Perfectly said. I think that’s such a great point, educating and treating the vendors as partners, because at the end of the day, I completely agree with you, many times they don’t even realize the exclusions they have on their policies, the fact that they don’t have coverage for something. It’s why we also say here at Jones that compliance is really a claims readiness function. Every certificate we review, every document that we get, we’re really answering one question: if something goes wrong on this job, will risk actually transfer the way the contract intended? That’s the job we’re doing when reviewing these insurance documents. And Alison, I think you already touched on this, but I would love to give you the opportunity to say it again. If you were to give somebody advice, maybe somebody who is not an insurance nerd like we are and has no insurance background, what are the two or three things you would tell them: you have to do this, this is where you need to pay attention?

Alison: The intersection between insurance and contracting is just inseparable. You have to have strong contracts at the foundation of any of these conversations about insurance. So I would start with every business out there having a template, and having master provisions of what you require in terms of insurance from your vendors. Every one of the builders in our space, including Meritage, has a list of requirements, and these have to be agreed to, negotiated, contracted in the master agreement with the vendor or the business partner, whoever it is. And you look at it based on the scope of the risk: from people who clean model homes all the way up to master land developers who work with us on massive projects. Understanding and tailoring: okay, from you, I need this GL form and I need this GL level, and I need this additional insured protection at a minimum, and I need primary and non-contributory. Making sure that’s in your contract. With architects and engineers, surveyors, professional consultants, attorneys, you’re going to want that professional liability coverage, and outlining how much you want and how long you want them to carry it. You have to think about what’s the tail on a claim that could come up, and I’d want them to have that coverage in place for the length of that claim tail at least, to have that money behind us.

Alison: And then two that are really significant and sometimes overlooked, and they can be jurisdictional, especially in places like Texas: workers comp and auto. Those are both spaces where there is significant potential for injury claims. Making sure that somebody has comp in place, and if you’re doing operations in multiple jurisdictions with an entity, making sure they have comp that covers all of those operations, is really important. I know there are some states that allow waivers for certain numbers of employees on comp, and then you have to take that decision about a waiver back to your business. Because if there’s an employee that doesn’t have comp that’s going to be working on your job site, or for your project, or at your business, that’s a risk you have to be aware of. And the commercial auto space is also ripe for big injury claims. Requiring anybody who’s going to be driving your products around, driving your employees around, on your job site operating a motor vehicle, to have that commercial insurance is really, really important. There are times we have to negotiate, where they say, I’m only going to be on this job site for this amount of time, I’m not even there that long. And I’m like: it doesn’t take that long to hurt somebody. They say, well, I only have my personal auto. Well, that may not even apply if you’re at a work site. So I caution people to really get very strong contracts in place outlining what the insurance requirements are. Maybe even having auditing standards internally, where you’re not going to accept reductions on limits, or you’re going to accept only an SIR of a certain amount or below, and what those checks are for what you are going to require. Pollution liability is another one people should think about depending on the space they’re in, sort of a non-standard coverage, but if something goes wrong or someone’s going to be handling hazardous materials, you’re really going to want it. So the strong contracts are really important.

Alison: And I think the other advantage to an enterprise like Jones is the paper trail that you have, and the accessibility of the documents. You’ve done a great job through your contracts and your negotiations and your COI tracking of making sure they’re there, and you need to be able to access them quickly if there’s a claim. Because if something happens and you need to tender to a GL carrier, because you’re tendering to OSHA within 8 hours or 24 hours, or something like that is happening, you need to know who to be communicating with. And they could have changed carriers. So am I tendering to the vendor, and then am I making sure that they put on notice each of the carriers who could potentially be on that risk? To do that quickly, you really need to have an organized platform where everything exists. I have loved the ease of use. The Jones platform is very intuitive and very user-friendly. To be able to just have an SSO landing page, to get on and type in even just the first few letters of the vendor I need, to pull up all of their history, to see the full policy, see the COI, see the communication status with the vendors, how many times have we reached out to them for X, Y, and Z, and whether there was a waiver on a certain provision, and if so, who approved it, so that we have that internal chain of command to say that somebody above approved. That accessibility piece is something businesses really need to be considering. Because if you’re doing this manually and your COIs are maybe saved on a server, or God forbid, they’re only saved in somebody’s Outlook inbox, what’s the business continuity plan for having other people access that information if they need it? Or if the server goes down? There’s this redundancy for us built in with having it with Jones: we have access all the time to the information, we can download it, we can archive historical records as needed. To have a partner in maintaining the paper trail for us is really critical. It comes up in litigation with claims all the time: you’ve got to produce that, you’ve got to produce this really quickly. Just think of all the time you save by not having a single person responsible for organizing and maintaining that.

Jessica: I appreciate that answer, Alison. We are very thrilled with the partnership we have with Meritage. And I just want to say thank you so much, this was exactly the conversation I hoped we would have. I think everyone that joined feels the same, so thank you for spending this time with us. We do have a question that I want to address before we part, and that question says: one quick question, we are the tenant. Should our company business also be included as an additional insured on the vendor certificate of insurance, along with the property owner, board of managers, etc.? Alison, you want to take that?

Alison: Yeah. What I would first do is look to the lease agreement. If you’re the tenant, you’ve probably got a lease agreement with the landlord, and the landlord may have certain coverages that are required: you need a BOP, and you need property, and all of these other things. So understanding first, what did that landlord require of you? Get that information. And the landlord might actually say, if you’re ever going to have a vendor out there performing work or doing something, we need to be covered, everybody downstream from you needs to cover us on their policies. So start with the contract. And then absolutely, it would never hurt to have the vendors that are going to be out on your site naming everybody up the food chain. Anybody that you could expect to get an indemnification or defense demand from, you’re going to want to move that risk if you can. So I recommend it.

Jessica: Amazing. We do have more questions popping in, and we’re going to be addressing those in the follow-up email, because we are at time here. We’ll be sending all of you a follow-up with the recording of this conversation, answers to any questions that haven’t been addressed, and a checklist of the topics we covered, as well as how to do some of this review yourself. And of course, you have Jones to count on if you ever think about automating your compliance review process. Alison, again, thank you so much, and thanks everyone that joined. Have a great rest of your day.