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Discussion Starter · #1 ·
Hi
I would appreciate inputs on my situation. We have a fire sprinkler company that is doing the fire sprinklers for our commercial space, a unit in a business park. They are required by the fire dept. to do hydro testing. Our sprinkler company insists we need to carry our own liability insurance in case the hydro testing causes another unit's sprinkler to malfunction. I feel their liability insurance should cover this liability. What is the correct way of doing this?

TIA.
 

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Why don't you contact your insurance carrier and ask them that question?
Shouldn't you already have liability insurance?
Ron
 

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Yes, check. Typically your policy will cover this sort of thing. We couldn't get a lease without it.
 

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Discussion Starter · #4 ·
Points taken, thank you for your advises. However, does anyone find it strange that a licensed company that installs and maintains fire sprinkler systems does not use their liability insurance to cover these things?
 

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Points taken, thank you for your advises. However, does anyone find it strange that a licensed company that installs and maintains fire sprinkler systems does not use their liability insurance to cover these things?
They may have lost their insurance. I know two contractors that have lost their policies right in the middle of projects. They are not happy campers at the moment.

But talk to your insurer. If it's an outside contractor putting in heads in your unit, and he wants you to cover the insurance for the rest of the units in case his pressure test pops a head in someone else's unit, that is odd, and I would never agree to it. That suddenly makes you liable. A good insurance agent should sort this out for you.
 

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First - do you have a current Certificate of Insurance from them - it should also name you as an Additional Insured. If not, and they won't supply one, get a new contractor. You should never allow any contractor to work on your property until you have a COI from them. I deal with sprinkler contractors all the time - never ever heard of one wanting a client to provide primary coverage.
 

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Discussion Starter · #7 ·
First - do you have a current Certificate of Insurance from them - it should also name you as an Additional Insured. If not, and they won't supply one, get a new contractor. You should never allow any contractor to work on your property until you have a COI from them. I deal with sprinkler contractors all the time - never ever heard of one wanting a client to provide primary coverage.
That's what I said. However, this is a commercial property governed by our owner's association, and this is the only sprinkler contractor they are allowing to touch any part of the sprinkler system in our building. The owner's association is agreeing with the contractor that we need our own liability coverage in case of damage to other units.

I'm glad I am receiving information from alot of supportive members here. Thank you.
 

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That's what I said. However, this is a commercial property governed by our owner's association, and this is the only sprinkler contractor they are allowing to touch any part of the sprinkler system in our building. The owner's association is agreeing with the contractor that we need our own liability coverage in case of damage to other units.

I'm glad I am receiving information from alot of supportive members here. Thank you.
That adds another wrinkle to the situation. If the Association is providing the contractor - then they should be the one with the COI from the sprinkler contractor. The COI goes to whomever is signing the contract for the work. Should you have your own liability coverage as a business - Yes. Should you be required to assume the liability of a third party for sprinkler work -No.

Unless you sign an agreement assuming the liability of the contractor (or in some states assume it orally) it won't matter anyway. His damage - his liability. The problem is defense costs that you could get stuck with. In some states - even if you signed a Risk Transfer Agreement it would not matter. In Ohio for example a contractor cannot transfer sole negligence to another party. But again, the defense cost issue comes into play (your coverage).

If the Association is hiring the contractor then in my opinion - your third in line for any damage he causes. This whole thing doesn't smell right. It almost sounds like the contractor has no coverage - if he doesn't he has no business performing work at the location.

ON EDIT: "Unless you sign an agreement assuming the liability of the contractor (or in some states assume it orally) it won't matter anyway. His damage - his liability." Unless you hire an uninsured contractor - then it's your baby.
 

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I handle insurance work in this specific field; their insurance should respond, but I would make sure your policy would respond as well, because a lot of these installation companies don't have the greatest of insurance due to negative loss experience.
 
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