Tag Archives: Certificate of Insurance

Sub-Manufacturers And Suppliers Warranty Endorsement – One Scary Endorsement!

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The other day we were delivering a policy for American Safety Indemnity Company and we notice an endorsement we have never seen before. This endorsement is called Sub-Manufacturers and Suppliers Warranty or ES 98 100 05 04.

 We requested a copy from the underwriter and were completely surprised to find out that this endorsement had the power to remove product liability insurance coverage if the following conditions were not met:

 

  1. All sub-manufacturers and suppliers that supply any goods or products to you must have Product Liability insurance with limits no less than $1,000,000.
  2. You must have Certificates of Insurance from all sub-manufacturers and suppliers.
  3. All sub-manufacturers and suppliers must name you as “Additional Insured” and must be evidences on the Certificates of Insurance provided to you.

 This endorsement goes on to state “ the insured (you) agrees that this insurance policy has been issued upon the above representations and warranties and that this insurance will not apply to claims arising out of work or operation performed by any sub-manufacturer and supplier unless all of the above conditions are met.

 If all of the above conditions are not met product liability insurance will not apply.

 The scary word in this endorsement is “all”.  A more reasonable phasing of this endorsement would be “endeavor to” meet the above conditions.

 If you have this endorsement in your policy, make sure you contact your insurance agent to have it removed or find another insurance policy that does not have this endorsement.

Don’t Be Afraid To Ask To Be Named As Additional Insured

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Do you think you are too small to ask your third party manufacturer or parts supplier to name you as an Additional Insured on their product liability policy? 

The fact is most legitimate businesses have anticipated this request and sees it as a minimum standard for good business practices.  It is common for most manufactures and suppliers to have a blanket vendors endorsement on their product liability insurance policy so they can name their clients as Additional Insured.

If your supplier or third party manufacture will not name you as Additional Insured on their product liability insurance policy and provide you with a Certificate of Insurance showing you as Additional Insured, you should consider this a “red flag” that your supplier or manufacture does not have a Product Liability Insurance Policy.

Remember, you are most likely buying the product based on the word or advertising of the supplier or manufacturer.  If they truly believe in the safety of their products or manufacturing process, they should not have any problem naming you as an Additional Insured on their Product Liability Insurance Policy.

If your manufacturer or supplier will not name you as Additional Insured, consider finding another manufacturer or supplier.