We're an offshore services business and a new client is asking for the items (below).
This is what we received in the modified services agreements:
Consultant, at its own cost and expense, shall maintain throughout the term of this Agreement the following
(a) commercial general insurance with a combined single limit of not less than $1,000,000 per occurrence, $2,000,000 general aggregate and $2,000,000 products/completed operations aggregate,
(b) umbrella liability insurance with a limit of $3,000,000 per occurrence,
(c) workers compensation insurance in statutory limits, and
(d) professional liability insurance with a limit of at least $5,000,000.
Consultant shall provide the Company with a certificate of such insurance, within ten (10) days of the execution and delivery of this Agreement and of each policy expiration.
1. How much each of this insurance cost (yearly)?
2. Is that an industry practice in services (commercial real estate outsourcing) business?
Hello! Actually that is a pretty standard clause and request. I happen to have that for one of my companies (services) and for convenience sake I originally reached out to my home owners insurance (Geico) in the US. They sourced a broker for me and I pay less than $2k a year but an added convenience is that you pay quarterly.
You can ask why the $2MIL option? And or maybe get insurance but don't include that particular one to save you money and maybe pay closer to $1500 or less...
When you do get the insurance if you do get it, make sure that you request to add this company in the coverage. Each commercial client you get should be added there even if the client itself doesn't ask for it...