Facilities Management professionals have a vital role in ensuring the safe operation of businesses and the effective management of risks associated with both facilities and personnel. Whether your company manages these risks directly or through a professional management company, vendor operations on your premises present a significant risk that must be controlled appropriately. If your company manages its own facilities, risk management depends on the contracts you hold with your vendors and how you manage the claims that arise. Legally enforceable indemnity and access to the vendor’s insurance are critical. Success requires navigating the differences in state law concerning what type of indemnity is permitted, how “additional insured” coverage forms are interpreted, and what contractual language is necessary to “trigger” vendor insurance policies. These issues become even more challenging when using a third-party facilities management professional. The contracts offered by most professionals include liability limitations, damage caps, and other mechanisms to reduce their liability for vendor claims. When using a professional manager, does your company still have access to indemnity and insurance from the vendors who will be operating on your premises? Is your insurance optimized to ensure that vendor insurance pays before yours does? Very often, little attention is paid to these questions until a bad claim appears.
SDV’s Facilities Management Practice Group is dedicated to helping companies face these challenges successfully. Ultimately, it is about insulating your company’s assets and insurance from vendor operation risk. On the “front end,” this involves optimizing the risk transfer plan through best-in-class contract and policy language. On the “back end,” this is about executing claim-specific strategies that transfer risk to vendors and protect your own assets and insurance.
Our firm can offer support to industry professionals in the following ways:
- Review clients’ existing insurance policies and provide recommendations for the development and implementation of effective risk management strategy
- Review agreements between clients and facilities management professionals for best-in-class risk management
- Review vendor subcontracts for proper indemnification and insurance language
- Develop a program to review vendor insurance for compliance with contractual risk transfer provisions
- Strategic planning for claims
- Negotiate with insurance carriers and provide insurance and indemnity litigation services when necessary
- Provide education and training to clients regarding emerging trends related to insurance and indemnity
For more information, please email us at firstname.lastname@example.org.