Contractual risk management saves $500K for client
Several minutes after starting his shift, an intoxicated front-end loader operator working for a temporary agency backed into a pole inside a warehouse bringing the entire roof down. Luckily, before the roof collapsed, he ran outside the warehouse and suffered no injuries. No one else was inside the warehouse at the time. Losses were estimated to exceed $500K, without any “loss of use” assessment.
The first correspondence from the vendor’s carrier was a “reservation of rights” letter requesting a contract copy of the service agreement between the vendor and company. Using our ContractualRM web-based application, the company’s risk manager retrieved a copy of the service contract and vendor’s current certificate of liability insurance with waiver of subrogation. The second correspondence from the vendor’s carrier was a settlement offer of $500K+ to cover the price of a new roof and any improvements to avoid future “loss of use” charges.
The client in the event above is a mid-size US corporation who has been using our ContractualRM software since 2008. Months before the roof incident, our client’s HR department was in a hurry to hire a front-end loader operator. The previous loader had left the job the shift before. Using our ContractualRM, an HR clerk, generated a “labor staffing agreement” (LSA) and sent it to one of company’s vendors. Right after, the ContractualRM alert system sent an email to the company’s risk manager to inform him of HR’s request. The same day, risk management received via email the LSA signed and faxed by the vendor. The signed contract included copies of vendor’s certificate of insurance, copies of the waiver of subjugation and additional insured endorsements. After reviewing the contract and certificates for proper coverage, the risk manager sent an email to HR authorizing the vendor to provide services to company. By the time the roof collapsed, the contractor’s risk had been already been transfered from the company’s property insurer to the contractor’s liability insurer.