Burbank Insurance Services: Contractual Risk Transfer (CRT) Program Assessment Checklist

As a contractor, you face numerous risks when working on construction projects. A well-designed Contractual Risk Transfer (CRT) program can help mitigate these risks by clearly defining each party’s responsibilities before work begins. Use this checklist to assess the effectiveness of your company’s CRT program and identify areas for improvement.

1. Written Contracts

  • [ ] Require written contracts with every third-party involved in your projects, including subcontractors, suppliers, and vendors.
  • [ ] Clearly outline lines of authority and responsibility within each contract.
  • [ ] Include indemnification agreements that protect your business from liability arising from the work of other parties.

2. Insurance Requirements

  • [ ] Specify insurance requirements and limits for all third parties, ensuring their coverage is equal to or greater than your own.
  • [ ] Require the following types of insurance:
  • [ ] Commercial general liability
  • [ ] Automobile liability (comprehensive)
  • [ ] Commercial excess liability (umbrella)
  • [ ] Workers’ compensation and employers’ liability

3. Certificates of Insurance (COI) and Additional Insured Endorsements

  • [ ] Obtain and maintain current Certificates of Insurance (COI) from all third parties.
  • [ ] Secure Additional Insured Endorsements from subcontractors’ general liability insurance carriers.
  • [ ] Regularly review and update COIs and Additional Insured Endorsements to ensure ongoing compliance.

4. Documentation and Record-Keeping

  • [ ] Maintain a clear documentation trail for each project, including contracts, COIs, Additional Insured Endorsements, and other relevant records.
  • [ ] Store records securely and in accordance with state requirements.
  • [ ] Ensure that all project files are easily accessible in the event of a claim or dispute.

5. Regular Program Review and Consultation

  • [ ] Review your Contractual Risk Transfer program at least annually to ensure its effectiveness and compliance with current laws and regulations.
  • [ ] Consult with an attorney knowledgeable in construction contracts to ensure that your CRT program is legally sound and tailored to your specific needs.
  • [ ] Work with your insurance agent to determine the appropriate insurance requirements and policies for your business and projects.

By completing this assessment and addressing any identified gaps, you can strengthen your CRT program and better protect your business from potential liabilities. Remember, a robust CRT program is just one component of a comprehensive risk management strategy. Consider complementing your CRT efforts with a thorough subcontractor selection process and a rigorous quality control program.

At Burbank Insurance Services, we are committed to helping contractors like you navigate the complex world of risk management. Our experienced team can provide guidance and support as you develop and refine your CRT program. Contact us today to learn more about how we can help you safeguard your business and achieve success in your construction projects.

This document is provided for informational purposes only and does not constitute legal, technical, or other professional advice. It is not intended to amend, modify, or expand any existing insurance policy or coverage. Always consult with legal counsel and your insurance agent to ensure that your CRT program meets your unique needs and complies with applicable laws and regulations.

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