Hardwood Floors December 2017/January 2018

BUSINESS BEST PRACTICES BUSINESS BASICS

Risk Management 101 (Continued)

job site, this liability insurance would cover the cost of defending the lawsuit along with paying any damages that are awarded against the company. Note that liability insurance coverage should start at $2 million. While many organizations may have $1 million of coverage, this amount is not su cient in today’s dollar terms given the cost to defend a personal injury lawsuit. As with the indemni cation provision, it is important to have the company’s lawyer and insurance representative involved in the review of liability insurance to ensure the company is ge ing comprehensive coverage. Of particular concern is the list of exclusions, which includes those items not covered under the policy. If the company needs coverage for those exclusions, it will need to purchase an endorsement to override the exclusion and be covered for that peril. Conclusion Now that you have an understanding of the risk management “tools,” you can begin drawing on them from your “toolbox” to minimize the risk to your company. Barbara Dunn O’Neal is a Partner with the Associations and Foundations Practice Group at Barnes & Thornburg where she concentrates her practice in association law and meetings, travel and hospitality law. Barbara serves as General Counsel to the National Wood Flooring Association, and can be reached at 312.214.4837 or barbara.dunnoneal@btlaw.com. This article shall not be considered legal advice. In all cases, groups should consult their legal counsel. ©Copyright 2017. Barbara F. Dunn O’Neal, Esq., Barnes & Thornburg LLP. All rights reserved under both international and Pan-American copyright conventions. No reproduction of any part may be made without the prior written consent of the copyright holder.

“Installer shall indemnify, defend, and hold harmless Company, its o cers, directors, employees and agents and each of them (collectively “the indemnitees”), from and against any and all claims, demands, actions, judgments, costs, and expenses, including costs of defense thereof, incurred by any of the indemnitees caused by or arising from the negligence, gross negligence, or intentional misconduct of Installer, its o cers, directors, employees, agents or contractors.” With this clause in place, should the installation be improper or someone gets hurt as a result and sues the company, the company can invoke its rights under the indemni cation clause and have the installer hire lawyers to defend the lawsuit on the company’s behalf right from the beginning and to pay any damages awarded against the company. Indemni cation clauses should be part of every contract as there is always the possibility that the good or service that is being purchased will cause harm to someone and the company will be sued. By having indemni cation in the contract, the company knows that it will be protected in such circumstances. One last note on indemni cation: it is essential to have the company’s lawyer dra or review each indemni cation provision as this is the type of clause in which one word can make a di erence in the scope of the protection. Risk Retention (Insurance) Another way an organization can cover its risk is through risk retention. When a company purchases insurance, it agrees to “retain” the risk (up to the dollar amount of the deductible). Everything in excess of that deductible is covered by the insurance company. General commercial liability insurance is o en referred to as GCL or CGL. is insurance is the backbone of any organization’s insurance coverage as it protects against personal injury or death, among other things. For example, if an organization is sued by a customer who tripped on a loose board at the

KEEP IN MIND It is always important to have a company lawyer and insurance representative involved in the review of liability insurance to ensure the company is getting comprehensive coverage.

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