Franchisers
Franchisers extend certain “use” rights
to franchisees. Included within these rights is the identity
of the franchise organization through the use of signs, logos,
operating systems, custom computer and software programs and
overall advertising exposures.
In most cases, the identity to the
public of the owner of any franchised hotel or restaurant is
the franchiser first and the actual owner second. CSC tracks
and verifies compliance of the franchisees insurance to
include the franchiser's insurable interest in the property.
In addition, CSC verifies that the franchisee adequately
insures equipment owned by the franchiser and leased to the
franchisee.
TOP
Banks and
Lending Institutions
Banks, Savings and Loans and Credit
Unions maintain an insurable interest in collateralized
property such as automobiles, buildings, business personal
property, computers and other assets. Until a loan is paid in
full, or the lease reaches maturity, it is important for these
financial institutions to verify that the collateral is
properly insured throughout the term of the loan or lease. CSC
tracks millions of dollars worth of assets for these
organizations to insure that if the assets are destroyed,
damaged or stolen, that the borrower or lessee maintains
adequate insurance and, further, the financial institution is
“first in line” to receive the insurance proceeds. CSC
monitors the insurance on this collateral in an effort to
identify any lapses in insurance on the part of the borrower
or lessee.
CASE STUDY
A mid sized savings and loan
internally tracked the insurance certificates for borrowers
without any compliance system. Due to the nature of their
loans, which consisted of primarily vehicles and home
mortgages, the bank discovered that keeping up the time
necessary to keep up with certificate tracking required three
people on a full-time basis. On several separate occasions,
the bank incurred direct losses
as the result of uninsured
damage to real property secured by loans.
These
losses exceeded $250,000. CSC was retained to provide
the tracking and compliance services for a fraction of the
cost to administer the process internally. In addition, those
persons who handled the tracking internally were “freed-up” to
pursue other responsibilities within the
bank.
TOP
General
Contractors
In recent years many General Contractors
have had to absorb millions of dollars in lawsuits and
Workers’ Compensation claims from underinsured or non-insured
sub-contractors. CSC verifies that any sub-contractor
providing services on behalf of a general contractor and
project manager are adequately insured and, further, that both
the general contractor and property owner are named as an
additional insured. This is particularly critical in as much
as many sub-contractors tend to be smaller organizations with
limited assets
and tend to purchase minimum amounts of
liability insurance. In addition, many smaller sub-contractors
will have coverage canceled for non-payment of premiums or
switch insurance carriers in the middle of an insured project.
Recognizing this problem, CSC has developed an “early warning”
watch list to insure that agents or brokers of the smaller
general contractors notify CSC directly in the event of a
pending cancellation. As a result, clients of CSC have found
their compliance ratios with sub-contractors significantly
improve through our services.
CASE STUDY
A sub-contractor, conducting work on behalf of
a general contractor, was required to carry 10 million dollars
in liability coverage and to add the general contractor as an
additional insured.
The sub-contractor, through a negligent act, ignited
the insulation behind a wall, which developed into a major
fire.
The sub-contractor and general contractor were sued for
eight million dollars.
The general contractor failed to recognize that the
sub-contractor maintained only five million dollars in
liability coverage as opposed to the required 10 million.
Consequently, the general contractor had to file a
claim for the other five million under their own insurance
policy.
The general contractor could have avoided filing a
claim if they verified and tracked their sub-contractors
insurance certificates.
TOP
Manufacturers &
Wholesaler Distribution
Unlike many of the other types of
organizations outlined above, manufacturers and wholesalers
are exposed to lawsuits arising out of product failures and
product recalls. CSC tracks the insurance of those vendors
that provide parts or products, which go into the product
manufactured by our clients. In the event of a bodily injury
or property damage loss arising out of a defective part in our
client’s product, CSC is able to verify that such vendor is
carrying adequate product liability and product recall
coverage. In addition, CSC requires vendors to name CSC’s
clients as additional insureds thus providing our client with
the benefit of legal protection under the negligent vendors
policy and thereby reducing claims filed under our clients
insurance.
CSC has found an alarming amount of
vendors providing integral parts and products to our clients
not having any form of product recall coverage. In a number of
these cases, these vendors were providing key components in
automobiles, aircraft and rail systems.
CASE STUDY
A large paint manufacturer
experienced a significant number of claims in the southeast
part of the country when its white exterior paint turned
yellow on recently painted homes. It turned out that due to
excessive moisture in the area that the pigments in the paint
did not contain an algicide. Fortunately, CSC was able to
produce a certificate from the Raw Product (pigment) supplier,
allowing the manufacturer to successfully subrogate the
products claim.
TOP
Transportation
Special insurance is required in the
transportation industry. Whether it is governmental
requirements set for long haul trucking companies or the
intricate ocean cargo exposures, CSC is positioned with its
staff of insurance experts to establish tracking systems for
any transportation need. In addition, there are a variety of
ways that transit insurance
coverage may handle the risk of
loss that occurs during the shipment. CSC understands the
intricacies of this business and can perform the task of
monitoring the cargo insurance far more efficiently than those
parties involved in the ownership, transportation or purchase
of the product.
CASESTUDY
One of our clients contracted an
independent hauler who caused a fatal accident on the highway.
Within hours of the accident the ICC advised our client that
they were going to visit their offices the next day and review
the insurance certificates of all truckers being used. Within
18 hours CSC supplied over 500 current certificates to the
client avoiding what may have amounted to thousands of dollars
in fines.
TOP
Government
Institutions
Many governmental organizations enjoy
varying degrees of immunity from third party lawsuits.
However, these organizations rely heavily upon outside
contractors to provide goods and services. While the immunity
affords some protection for the governmental body, injuries
occurring to third parties from the negligent acts of
contractors and vendors remain a constant concern for
government institutions. CSC tracks and monitors insurance
compliance for those governmental
institutions that utilize
outside contractors or for vendors providing products to the
entity. Whether it is a Federal, State or Local government
body, CSC can provide full services for a fraction of the cost
of administering the program internally, thereby protecting
the taxpayer from uninsured claims while reducing
administrative costs.
TOP
owner to
be insulated from claims caused by a negligent tenant. As
such, CSC verifies that both the landlord and the property
manager are named as an additional insured on the tenant’s
policy.