 2003 Arthur J. Gallagher & Co. Contractor Insurance Requirements SMU Safety Fair Dallas, Texas May 21, 2004 SMU Safety Fair Dallas, Texas May 21, 2004 Presented by: Jim Hunter Arthur J. Gallagher & Co. - Dallas

 2003 Arthur J. Gallagher & Co. Methods to Handle Risk  Eliminate the Risk  Assume the Risk  Transfer the Risk  Eliminate the Risk  Assume the Risk  Transfer the Risk

 2003 Arthur J. Gallagher & Co. Risk Transfer  Purchase Insurance  Contractual Transfer  Purchase Insurance  Contractual Transfer

 2003 Arthur J. Gallagher & Co. What is Insurance  Insurance is a contract (insurance policy) to guarantee compensation for a specified loss such as fire, flood, injury, death and so forth in return for premium paid

 2003 Arthur J. Gallagher & Co. Why Buy Insurance  To protect SMU’s assets Required as security Required by Federal, State, County or Local Laws To be a Good Citizen  To protect SMU’s assets Required as security Required by Federal, State, County or Local Laws To be a Good Citizen

 2003 Arthur J. Gallagher & Co. Contractual Transfer  Most contacts are going to contain a “Indemnity Provision or Clause”  Be certain that this is a “Quid pro Quo” clause – meaning that: I am responsible for my stuff and my actions You are responsible for your stuff and your actions  Require insurance to guarantee that the other party will take care of their stuff and their actions  Most contacts are going to contain a “Indemnity Provision or Clause”  Be certain that this is a “Quid pro Quo” clause – meaning that: I am responsible for my stuff and my actions You are responsible for your stuff and your actions  Require insurance to guarantee that the other party will take care of their stuff and their actions

 2003 Arthur J. Gallagher & Co. Contractual Insurance Requirements Most contracts will contain insurance requirements such as:  Commercial General Liability Bodily Injury & Property Damage:$1,000,000 General Aggregate $1,000,000 Products Aggregate $1,000,000 Each Occurrence $ 500,000 Fire Damage Limit  Automobile Liability to include owned, hired and non-owned Bodily Injury:$ 250,000 Each Person $ 500,000 Each Accident Property Damage:$ 100,000 Each Accident Or: Combined Single Limit:$1,000,000 Each Accident Most contracts will contain insurance requirements such as:  Commercial General Liability Bodily Injury & Property Damage:$1,000,000 General Aggregate $1,000,000 Products Aggregate $1,000,000 Each Occurrence $ 500,000 Fire Damage Limit  Automobile Liability to include owned, hired and non-owned Bodily Injury:$ 250,000 Each Person $ 500,000 Each Accident Property Damage:$ 100,000 Each Accident Or: Combined Single Limit:$1,000,000 Each Accident

 2003 Arthur J. Gallagher & Co. Contractual Insurance Requirements Continued Workers’ Compensation State Statutory Employers Liability $1,000,000 Each Accident $1,000,000 Disease Limit $1,000,000 Each Employee Optional Coverage Depending on type of contract may want to require Professional Errors & Omissions May also be a need to require builders risk if for new construction or installation floater if for remodel or equipment installation Workers’ Compensation State Statutory Employers Liability $1,000,000 Each Accident $1,000,000 Disease Limit $1,000,000 Each Employee Optional Coverage Depending on type of contract may want to require Professional Errors & Omissions May also be a need to require builders risk if for new construction or installation floater if for remodel or equipment installation

 2003 Arthur J. Gallagher & Co. Contractual Insurance Requirements Continued  Be certain to require that the insurance policies include:  SMU as an “Additional Insured” Party  That the policy contains a “Waiver of Subrogation” in favor of SMU  Obtain a Certificate of Insurance before work is begun  Be certain to require that the insurance policies include:  SMU as an “Additional Insured” Party  That the policy contains a “Waiver of Subrogation” in favor of SMU  Obtain a Certificate of Insurance before work is begun

 2003 Arthur J. Gallagher & Co. What to Watch for in the Contract  Indemnity provision is “Quid pro Quo”  Insurance Requirements are met or exceeded  SMU included as an Additional Insured Party  Waiver of Subrogation in favor of SMU  If purchasing product from Vendor be certain that liability remains with vendor unless altered or repackaged by SMU  Indemnity provision is “Quid pro Quo”  Insurance Requirements are met or exceeded  SMU included as an Additional Insured Party  Waiver of Subrogation in favor of SMU  If purchasing product from Vendor be certain that liability remains with vendor unless altered or repackaged by SMU

 2003 Arthur J. Gallagher & Co. QUESTIONS ?????