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Whoops, I Missed That! The Fine Print in Controlled Insurance Program Agreements

Updated: Jan 25, 2021

Cathy Wells spoke at the IRMI Construction Risk (Virtual) Conference on October 19-20. Her presentation highlighted a wide variety of program agreements in the CIP marketplace to identify areas that can be negotiated to provide the CIP sponsor and participants with a much better outcome. She made the following points:

  • Program agreements are contracts that spell out rights and responsibilities between the insured and the insurer regarding collateral and claims obligations for loss sensitive insurance programs.

  • Often times, the underwriter will insert provisions regarding program administration and safety requirements that can cancel the insurance program if they are not followed.

  • Be sure to fully vet the program agreement prior to binding when an insured has the most leverage. Incorporate the program agreement vetting process into the underwriting stage and make it a component of the insurer selection process.

  • Propose amendments to the program agreement that promote transparency and balance contract language that offers some rights to the insured. When proposing amendments to the language, cite examples of how other insurers have agreed to the proposed amendments. Lean on your broker to obtain such examples to use during the negotiation process.

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