Insurance Requirements: Understanding The Terminology

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co-sponsored byInsurance Requirements:Understanding theTerminologyApril 30 & May 1, 2019#2019NYGovBuy@NYSPro@nysprocurement

2Speakers#2019NYGovBuy@NYSPro@nysprocurement

#2019NYGovBuy@NYSPro@nysprocurement3Robert Hall, Casualty Insurance AnalystBureau of Risk and Insurance ManagementWalter Peretti, Assoc WC ExaminerNYS Workers Compensation BoardPaul Hennessey, Assistant VPCool Insuring Agency

#2019NYGovBuy@NYSPro@nysprocurement4What is the Bureau of Risk & InsuranceManagement (BRIM) Insurance Procurement - BRIM contracts with brokers to placeinsurance coverage when required by legislation or contracts. Insurance Expertise - Shift risk away from the State (and a contract’sauthorized user) and onto the contractor based upon the scope of work. Write insurance requirements for contracts for agencies Review insurance documents for agencies

#2019NYGovBuy@NYSPro@nysprocurement5What is the Workers’ Compensation BoardMission: The New York State Workers' Compensation Board protects therights of employees and employers by ensuring the proper delivery of benefitsto those who are injured or ill, and by promoting compliance with the law. Before enactment of the Workers' Compensation Law, when a worker wasinjured, the only remedy was to sue in the courts. The employer couldalways raise an objection that the worker had assumed the risk ofemployment, or the injury was caused by the worker's negligence or that ofanother worker. Today, the workers' compensation system guarantees both medical careand weekly cash benefits to people who are injured on the job. Weekly cashbenefits and medical care are paid by the employer's insurance carrier, asdirected by the Workers' Compensation Board.

#2019NYGovBuy@NYSPro@nysprocurement6Who is Cool Insuring Agency, IncCool has held contracts with OGS BRIM and Fleet for over 20years Broker of Record on BRIM’s contract for standardcommercial lines Fleet Self-Retained Auto Program – Auto ClaimsAdministrator

7Importance ofInsurance Requirementsin Contracts#2019NYGovBuy@NYSPro@nysprocurement

ew York State is “self-retained” – we do not purchaseinsurance unless required by contractExamples: State owns close to 19,000 buildings; those buildings are notinsured If you work for a State agency, your computers in your officeare not insured

#2019NYGovBuy@NYSPro@nysprocurement9Responsibility of RiskContract specifications make prime contractors responsible forthe risks associated with the scope of work that they performunder the contract and the work of any subcontractor Why? Because there is risk in the field in which yourcontractor chooses to do business. Vendors must be fully compliant with insurance requirementslisted in a solicitation before receiving a contract

10Types ofInsurance Policies#2019NYGovBuy@NYSPro@nysprocurement

#2019NYGovBuy@NYSPro@nysprocurementCommon Coverages Required in Contracts Commercial General LiabilityAutomobile LiabilityProfessional Liability and Errorsand Omissions (E&O)Data Breach/Cyber LiabilityTechnology E&OEnvironmental Liability Crime InsuranceGarage LiabilityGarage KeepersUmbrella/ExcessWorkers CompensationDisability*Policies in bold are requirements in all OGS Contracts11

#2019NYGovBuy@NYSPro@nysprocurementCommercial General Liability (CGL)“Protects against liability claims for bodily injury (BI) andproperty damage (PD) arising out of premises, operations,products, completed operations; and advertising andpersonal injury (PI) liability.”www.irmi.com12

#2019NYGovBuy@NYSPro@nysprocurement13General Insurance Concepts / ExcessLiabilityCertificate of Insurance (COI) – An Acord form or equivalent, acts as proof ofinsurance– COI provides limited information related to the policies, and can be viewed asa “snapshot” of all listed coverages as of the date the certificate wasproducedWhat information can be found on the COI? Insurer namesPolicy numbersPolicy termsPolicy Limits Basis on which the policy is writtenAdditional Insured statusWaiver of Subrogation statusSelf Insured Retentions/ Deductibles

#2019NYGovBuy@NYSProCertificate of Insurance@nysprocurement14

#2019NYGovBuy@NYSProCertificate of InsuranceSIR/DEDUCTIBLE@nysprocurement15

#2019NYGovBuy@NYSPro@nysprocurement16Occurrence vs. Claims-made Coverage Occurrence policies covers damages that “occur” during thepolicy period, regardless of when the claim is filed. In effect,an Occurrence policy offers permanent coverage forincidents that occur during the policy period Claims-made policies cover damages only when both thealleged incident and the resulting claim happen during theperiod the policy is in force. A Claims-made policy will coverclaims after the coverage period only if the insuredpurchases an extended reporting period or “tail” coverage

#2019NYGovBuy@NYSPro@nysprocurement17Self-Insured Retention (SIR) / Deductible SIR - the dollar amount that must be paid by the insured beforethe insurance policy will pay on a loss above the SIR Deductible - the insurer would pay the defense and indemnitycosts on the insured’s behalf and then seek reimbursement of thedeductible payment from the insured With SIR, you must make sure a Contractor has the day onedollars necessary for any defense and indemnity that falls withinthe SIR limitBRIM completes a financial review when vendor evidences a SIR/deductible over 100,000

#2019NYGovBuy@NYSPro@nysprocurement18Additional Insured (AI) As an AI, an organization (OGS/Authorized Users) enjoysthe benefits of being insured under an insurance policy, inaddition to the Insured (vendor submitting proposal) On OGS centralized contracts you will see, the AIendorsements must name “The People of the State of NewYork, The New York State Office of General Services, anyentity authorized by law or regulation to use any contractresulting from this solicitation and their officers, agents andemployees”

#2019NYGovBuy@NYSPro@nysprocurementAI Endorsement – CGL – On-going WorkSection Title –Arial Bold19

#2019NYGovBuy@NYSPro@nysprocurementAI Endorsement – CGL – On-going Work20

#2019NYGovBuy@NYSPro@nysprocurementAI Endorsement – CGL – Completed Operations21

#2019NYGovBuy@NYSPro@nysprocurementAI Endorsement – CGL – Completed Operations22

#2019NYGovBuy@NYSPro@nysprocurement23Waiver of Subrogation Prevents the vendor’s insurer from attempting to seekreimbursement from a third party (the State/AuthorizedUsers) who caused any kind of loss to the insured Why is this necessary? The State as sovereign can only besued in the Court of Claims, so we cannot open the State upto prospective liability.

#2019NYGovBuy@NYSPro@nysprocurementCertificate of InsuranceAgent’s Signature24

#2019NYGovBuy@NYSPro@nysprocurement25OGS accepts on COI in lieu of anEndorsement Primary and non-contributory – Establishes the order orpriority of coverage Loss Payee (in Crime Insurance requirements) – Theparty to whom the claim from a loss is to be paid

#2019NYGovBuy@NYSPro@nysprocurement26Automobile Liability InsurancePolicy provides both liability and physical damage coverage. Liability coverageresponds to third party claims arising out of the ownership, maintenance, or use ofautomobiles, personal injury protection, and uninsured/underinsured motorists,Physical damage is first party coverage that insures against two primary types ofloss: Collision: Covers loss to a covered auto and its equipment resulting fromcollision or overturn Comprehensive: Covers loss to a covered auto and its equipment resultingfrom any cause other than collision or overturn, except those losses that arespecifically excluded

#2019NYGovBuy@NYSPro@nysprocurementCertificate of Insurance - Auto27

#2019NYGovBuy@NYSProAI Endorsement - Auto@nysprocurement28

#2019NYGovBuy@NYSProAI Endorsement - Auto@nysprocurement29

#2019NYGovBuy@NYSPro@nysprocurement30Umbrella / Excess LiabilityRequired insurance coverage limits may be provided through acombination of primary and excess/umbrella liability policies.Umbrella liability is “designed to provide protection againstcatastrophic losses. It is generally written over various primaryliability policies, most commonly the business auto policy andcommercial general liability policy. An Umbrella / Excess policy canalso be written over other types of liability policies, includingwatercraft and aircraft liability polices ”www.irmi.com

ss Coverage BRIM requires the Umbrella Schedule or Excess Schedule orunderlying coverage go confirm minimum limits are met Policies should “Follow Form” – can note on COI or sendendorsement Must request the Umbrella/Excess policies have AI coverage on aprimary and non-contributory basis Must waive subrogation If does not follow form, need AI endorsement

#2019NYGovBuy@NYSPro@nysprocurement32Umbrella Schedule of Underlying CoverageSection Title –Arial Bold

nt

#2019NYGovBuy@NYSPro@nysprocurement1. Develop the SolicitationAPPLICABLELAWNYS Disability BenefitsInsurance and PaidFamily LeaveNYS Workers’CompensationEXEMPTIONPROOFFile Certificate ofAttestation forExemption; FormCE-20034

#2019NYGovBuy@NYSPro@nysprocurement352. Inform bidders of the Insurance RequirementsYou are responsible for:1Providing language denoting theinsurance requirements2Linking bidders to wcb.ny.gov

#2019NYGovBuy@NYSPro@nysprocurement363. Bid Opening & Evaluation (WCB Requirements)WCB Insurance ProofCertificate of NYS Workers’ Compensation Insurance (Form C-105.2)Issued by private insurance carriersCertificate of Insurance (Form U26.3)Issued by the NYS Insurance Fund (NYSIF)Certificate of Self-Insurance (Form SI-12)Issued by the NYS Workers’ Compensation Board, Self-Insurance OfficeNote: A simple “ACORD” form is not sufficient!

#2019NYGovBuy@NYSPro@nysprocurement374. Bid Opening & Evaluation (DB/PFL Requirements)Disability Benefits and Paid Family Leave ProofCertificate of NYS DB and PFL Insurance (Form DB-120.1)Issued by private insurance carriers & NYS Insurance FundCertificate of Self-Insurance (Form DB-155)Issued by NYS Workers’ Compensation Board, Self-Insurance OfficeNote: A simple “ACORD” form is not sufficient!

#2019NYGovBuy@NYSPro@nysprocurement385. Certificate of Attestation for Exemption(Form CE-200)Certificate of Attestation of Exemptionfrom New York State Workers’ Compensation and/orDisability and Paid Family Leave Benefits Insurance Coverage**This form cannot be used to waive the workers’ compensation rights or obligations of any party.**The applicant may use this Certificate of Attestation of Exemption ONLY to show a government entity that New York Statespecific workers’ compensation and/or disability and paid family leave benefits insurance is not required. The applicantmay NOT use this form to show another business or that business's insurance carrier that such insurance is not required.Please provide this form to the government entity from which you are requesting a permit, license or contract. This Certificate willnot be accepted by government officials one year after the date printed on the form.In the Application of(Legal Entity Name and Address):345 IncDBA: One Plus Two1 Pine StChamplain, NY 12919-5211PHONE: 518-486-9586 FEIN: XXXXX3951Business Applying For:Business LicenseFrom: NYC Consumer AffairsWorkers’ Compensation Exemption Statement:The above named business is certifying that it is NOT REQUIRED TO OBTAIN NEW YORK STATE SPECIFICWORKERS’ COMPENSATION INSURANCE COVERAGE for the following reason:The business is a two person owned corporation, with those individuals owning all of the stock and holding all offices of the corporation(each individual must hold an office and own at least one share of stock). Other than the two corporate officers/owners, there are noemployees, day labor, leased employees, borrowed employees, part-time employees, other stockholders, unpaid volunteers (includingfamily members) or subcontractors.Corporate Officers:Test P Test President, Test L Test TreasurerDisability and Paid Family Leave Benefits Exemption Statement:The above named business is certifying that it is NOT REQUIRED TO OBTAIN NEW YORK STATE STATUTORYDISABILITY AND PAID FAMILY LEAVE BENEFITS INSURANCE COVERAGE for the following reason:The business MUST be either: 1) owned by one individual; OR 2) is a partnership (including LLC, LLP, PLLP, RLLP, or LP) underthe laws of New York State and is not a corporation; OR 3) is a one or two person owned corporation, with those individuals owningall of the stock and holding all offices of the corporation (in a two person owned corporation each individual must be an officer and ownat least one share of stock); OR 4) is a business with no NYS location. In addition, the business does not require disability and paidfamily leave benefits coverage at this time since it has not employed one or more individuals on at least 30 days in any calendar year inNew York State. (Independent contractors are not considered to be employees under the Disability and Paid Family Leave Benefits Law.)I, Test P. Test, am the President with the above-named legal entity. I affirm that due to my position with the above-named business I have the knowledge,information and authority to make this Certificate of Attestation of Exemption. I hereby affirm that the statements made herein are true, that I have notmade any materially false statements and I make this Certificate of Attestation of Exemption under the penalties of perjury. I further affirm that Iunderstand that any false statement, representation or concealment will subject me to felony criminal prosecution, including jail and civil liability inaccordance with the Workers’ Compensation Law and all other New York State laws. By submitting this Certificate of Attestation of Exemption to thegovernment entity listed above I also hereby affirm that if circumstances change so that workers’ compensation insurance and/or disability and paidfamily leave benefits coverage is required, the above-named legal entity will immediately acquire appropriate New York State specific workers’compensation insurance and/or disability and paid family leave benefits coverage and also immediately furnish proof of that coverage on forms approvedby the Chair of the Workers’ Compensation Board to the government entity listed above.SIGNHERESignature:Exemption Certificate Number2018-003695Date:ReceivedApril 27, 2018NYS Workers’ Compensation BoardCE-200 01/2018Proof the business is exempt fromneeding Workers’ Compensation,Disability Benefits, and/or PaidFamily Leave InsurancesMust be provided for each permit,license or contractAvailable at BusinessExpress.ny.gov

39Additional BasicInsurance Terms#2019NYGovBuy@NYSPro@nysprocurement

#2019NYGovBuy@NYSPro@nysprocurement40Certificate of Insurance (COI) – An Acord form or equivalent, acts asproof of insurance– COI provides limited information related to the policies, and can be viewedas a “snapshot” of all listed coverages as of the date the certificate wasproducedSchedule of Underlying Insurance – A form that lists the policies thatwill respond to loss before the Umbrella/ Excess policy is called on to pay anyportion of a loss.Blanket endorsement –An endorsement that includes general language(“As per written contract”) rather than naming a specific party

41Additional Risks#2019NYGovBuy@NYSPro@nysprocurement

#2019NYGovBuy@NYSPro@nysprocurementProfessional Errors and Omissions (E&O)42

#2019NYGovBuy@NYSPro@nysprocurementData Breach/Cyber Coverage43

#2019NYGovBuy@NYSPro@nysprocurementData Breach/Cyber CoverageCoverage may apply to:ØØØØØØØØCustomer Expert Services/Forensic Investigator CostsBreach Notification CostsCredit or Identity Protection CostsPublic Relations & Crisis Management ExpensesCall Center ServicesThird Party ClaimsLost Income – Resulting from the BreachRegulatory Fines & Penalties44

#2019NYGovBuy@NYSPro@nysprocurementContractors Pollution Liability45

#2019NYGovBuy@NYSPro@nysprocurementContractors Pollution LiabilityExample of Guidelines for Purchases of CPL Coverage46

#2019NYGovBuyCrime Insurance@NYSPro@nysprocurement47

#2019NYGovBuy@NYSPro@nysprocurement48Garage Liability Covers legal liability of franchised & non-franchisedautomobile, truck, truck-tractor, motorcycle, recreationalvehicle, and trailer dealers for claims of bodily injury (BI)and property damage (PD) arising out of businessoperations Essentially combines the coverage that is provided byAutomobile Liability and General Liability policies onto asingle policy

Coverage is for liability exposures with respect to damageto a customer's auto or auto equipmentØ Left in the dealer's care for service or repairØ Applies to parking lot operatorsØ Two ways this coverage is provided:ü Legal Liability - provides coverage when the insured is legallyresponsible for the lossü Direct Primary - provides coverage without regard to theinsured’s legal fault

#2019NYGovBuy@NYSPro@nysprocurementBuilders RiskCovers property in the course of constructionØ Mostly written on an inland marine formØ Usually written on an all risk basisØ Typically applies to property on site, at off-site storagelocations, and while in transitØ Can be written on a completed value or a reporting formbasis50

#2019NYGovBuy@NYSPro@nysprocurementBuilders Risk (continued)Ø Often referred to as “Installation Floaters” coverageØ Insures all parties with an insurable interest in theproperty being built/installedØ There is NEVER a need for more than one builder’srisk policy for a given project.51

#2019NYGovBuy@NYSPro@nysprocurement52Sexual Abuse and MolestationProvides coverage for allegations of “wrongful acts” ornegligence should an injury occur as a result of sexual abuseProtects against claims alleging wrongful acts with respect to:Ø Negligent employmentØ RetentionØ SupervisionØ InvestigationØ ReportingØ Failing to protect someone from sexual abuse

53Case Study#2019NYGovBuy@NYSPro@nysprocurement

#2019NYGovBuy@NYSPro@nysprocurement54Common WC & DI Issue Contractor ABC Company has contract (FEIN 12-3456789),and is a subsidiary of USA Company (FEIN 85-2963741),who is the parent company XYZ Company (FEIN 98-7654321) is a subsidiary of USACompany and has the employees who are completing thecontracted work.This is a common issue with contractors. Who needs to be theNamed Insured on the WC and DI certificates?What FEIN should be on the certificates?

Ice RemovalScope of Work: The Contractor shall be responsible for clearing the North entranceto the building, from ABC Highway building to the West entrance (bus route) from SmithRoad to front of the building; the roadway behind building, Jones Road; all parking lots andsidewalks of snow and ice. The primary objective is to provide safe access to and from thebuilding(s) and maintain orderly parking and pedestrian travel to meet the needs of theFacility.The Contractor shall provide snow plowing, snow blowing, snow shoveling, salting, sanding,and snow/ice removal services of designated OGS parking facilities, sidewalks, stairways,parking entrance ways, and parking travel lanes. The Contractor shall provide all necessarylabor, equipment and materials (including shovels, ice picks, plows, backhoe, dump trucks,front-end loader, snow blowers, salt, sand, calcium chloride, CG-90 Surface Saveranticorrosive deicer or approved equal, etc.) for the capability of removing all accumulationof snow and ice from the areas described herein, in a timely and efficient manner.

#2019NYGovBuy@NYSPro@nysprocurement56App to Scan IDs Phone app that scans photo ID to detect:Fake Driver License Expired License Authentic/OK to Serve Scans 2D barcode on state and provincial driver licenses(DL), identification cards, military & government IDs Reduces risk of serving underage patrons Track location occupancy Collects additional valuable information Automatically updates software for DL changes made in all50 states

57Questions?#2019NYGovBuy@NYSPro@nysprocurement

58Helpful Links &Resources#2019NYGovBuy@NYSPro@nysprocurement

#2019NYGovBuy@NYSPro@nysprocurement59Guidelines for Insurance Requirements in /2018/08/ccaguidelines.pdf Note – CCA subcommittee is currently in process of updatingWorkers’ Compensation Board website to check /icempcovsearch/icempcovsearch overview.jspInternational Risk Management Institute – Risk managementand insurance education and informationhttps://www.irmi.com

60Contacts#2019NYGovBuy@NYSPro@nysprocurement

#2019NYGovBuy@NYSPro@nysprocurement61Bureau of Risk and Insurance ManagementRobert Hall, Presenter, Casualty Ins Analyst518-473-0310Leeann Nopper, Assistant Director518-473-7346Leigh Brown, Director518-486-1887Section Title –Workers’ Compensation BoardArialBoldWalterPeretti,Presenter, Assoc WC Examiner 518-402-8330General Customer Service877-632-4996Cool Insuring Agency, IncPaul Hennessey, Presenter, Assistant Vice PresidentSend communication through Leeann Nopper

May 23, 2019 · Note: A simple “ACORD” form is not sufficient! Certificate of NYS Workers’ Compensation Insurance (Form C-105.2) Issued by private insurance carriers Certificate of Insurance (Form U26.3) Issued by the NYS Insurance Fund (NYSIF) Certificate of Self-Insurance (Form SI-12) Issued by t

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