This course on additional insured issues in construction provides an introduction to important risk management and insurance concepts for all contracting parties to a construction project. It provides an overview of the ways in which insured status under another party’s insurance program can be used as a risk transfer technique and examines in detail the terms and conditions on which insured status is provided in all the major lines of construction insurance. While other lines are also addressed, particular emphasis is placed on additional insured status under general liability insurance, since that is where the most important contractual risk transfers are located. The course describes and analyzes standard endorsement language used to make owners, contractors, subcontractors, lessors, and design professionals insureds under another entity’s CGL policy. It explores complex and emerging coverage issues such as “other insurance” concerns; recent revisions to the most widely used CGL additional insured endorsements; problematic coverage exposures such as completed operations and third-party-over suits; and relevant caselaw interpreting the language under which additional insured status is provided.

This course discusses the concept of “cost of risk” (COR) and how captive insurance can be used to reduce these costs. After completing this course, you will understand what a captive is, how it can be used to reduce the cost of risk, and the different types of captives that are in use today. You’ll also understand the various functions that must be performed by a captive to be effective. Lastly, you will be introduced to the tax and accounting issues that impact the effectiveness of a captive in managing the financial impact of risk. This course is partly based on the best-selling book Captives and the Management of Risk by Kathryn A. Westover.

The second in a series of courses covering the fundamentals of risk finance and captive insurance, Captives as Risk Transfer Mechanisms focuses on how captives are used when risks are transferred between risk takers to improve risk financing efficiency. You will learn about the types of risk that can be placed in a captive, techniques used to quantify risk and develop insurance rates, the underwriting processes, and how reinsurance is used to protect the captive. The flexibility of captive insurance allows captives to finance risk off or on balance sheet, depending on which approach delivers the most financial benefit. The course will also provide an overview of some of the approaches of accomplishing this, such as with finite risk protection, loss portfolio transfers, and special purpose vehicles. This course is based on content included in Captives and the Management of Risk authored by Kathryn A. Westover and published by IRMI.

This contractors pollution liability course was developed to examine the scope of contractors’ pollution liabilities, including the legal theories upon which they are based. Pollution risks present unique challenges for contractors. While some pollution incidents are immediately apparent, others occur slowly, often undiscovered, for a period of time. In many cases, these damages may fall within the pollution exclusions of their commercial insurance policies. The scope of coverage for these risks under basic policies—including the standard commercial general liability (CGL), business auto, and umbrella policies—is examined in some detail, with specific attention to the risks that are not covered under these policies. Finally, the course takes an in-depth look at contractors pollution liability insurance and the scope of coverage available under these policies. Contractors pollution liability insurance is a nonstandard line of coverage; therefore, policy terms vary from one form to another. This course examines both the many similarities in these policies and the significant differences that can have a profound impact on a contractor’s coverage. A detailed overview of the purpose and function of contractors pollution liability insurance is provided, including a discussion of coverage triggers, covered damages, exclusions, and policy conditions, to name a few.

This course reviews the ways in which risk is allocated in construction contracts. In addition to a technical review of the types of techniques available, this course examines strategies for maximizing the effectiveness of risk transfers in construction contracts. Topics include indemnification provisions, waivers of subrogation, limitations of liability, insurance requirements, and some of the key areas of risk allocation in standard construction contracts. Tips for writing and negotiating fair and effective insurance requirements are provided where appropriate, as well as for verifying compliance with these requirements.

This course provides a basic understanding of controlled insurance programs (CIPs), commonly referred to as “wrap-ups,” as they are currently used in the United States. It discusses owner controlled programs (OCIPs) and contractor controlled insurance programs (CCIPs), outlining the requirements for a CIP to be feasible, possible problems that may arise and how to avoid them, the important insurance coverage issues for sponsors and participating contractors to consider, and administrative and safety programs that must be implemented to ensure success. The text seeks to maintain a balanced perspective, discussing sponsorship from both an owner’s and contractor’s viewpoints and including much information on the issues often encountered by participating contractors, along with suggestions for resolving them. Thus, this course should be helpful to those who are considering the possibility of sponsoring a CIP as well as those who work on projects insured in CIPs.

Businesses are often good at protecting themselves from obvious risks of property damage and liability. But what about the risk of customer nonpayment? Businesses are not nearly as likely to be covered for that, although they could be. One reason that more businesses do not have this coverage is that many business owners and insurance producers simply are not aware that such coverage exists. Or if they are aware of it, they do not know enough about it to understand how it applies to them. This course discusses the insurance that covers the risk that a customer may not, under certain circumstances, pay a supplier for goods or services sold on credit. Credit insurance is specifically designed to protect commercial businesses from the risk of customer nonpayment. And it is to a businesses’ benefit that this important coverage be considered.

This design-build risk and insurance course was developed to provide an introduction to important risk management techniques and concepts for design-build construction project participants. It provides a general overview of the design-build construction project delivery method, including the advantages and potential disadvantages of this approach for both project owners and the design-build team. Specific attention is given to the risks encountered in design-build construction with an emphasis on those provisions that present unique or non traditional risk allocations. Significant attention is given to the scope of coverage contractors have for these risks in their basic insurance program, as well as their professional liability insurance policies. A detailed overview of the purpose and function of contractors professional liability insurance and architects and engineers professional liability insurance is provided, including a discussion of coverage triggers, covered damages, exclusions, and policy conditions, to name a few.

Captive insurers continue to be formed even during soft market conditions, because when properly used, the captive is an effective risk management tool. Industry statistics indicate that there are more than 5,000 captives on a worldwide basis and that, even during the soft market of the 1990s, the rate of increase in active captives averaged about 5 percent annually. Accurate numbers are hard to achieve in part because of the different classifications of captives. What is a captive in one domicile may be a commercial reinsurer in another. This course examines three aspects of captive management with emphasis on the legal environment in which captives must operate: the formation of a captive, captive operations, and the issue of unrelated business.

Any company that does business in a developing country is exposed to political risks that can result in significant losses. This is true whether the firm opens a sales office, owns a warehouse, runs a factory, conducts exploration work, operates a mine, or performs some other activity. Investors also face risks associated with emerging market debt, equity instruments, and lending. Reducing the exposure to political risks is an important aspect of any such operation. Political risk insurance provides protection against losses that result from currency restrictions, expropriation, and political violence. The purpose of this course is to introduce insurance producers to political risk insurance so they, in turn, can discuss this subject with their clients.

This course is intended to help auditors and other finance professionals learn to recognize and address risks of fraud, waste, and abuse in the Construction industry. Practical solutions are offered for weaving fraud detection and recognition into daily processes to maintain process flow while protecting against wrongdoing. The course addresses fraud occurring within the primary processes inherent in any organization, regardless of its location. Students will gain an understanding of how fraud affects every organization and how to recognize and address the symptoms that will help them become more vigilant.

This course provides a detailed understanding of the workings of commercial umbrella and excess coverage, with an emphasis on how the coverage terms and provisions apply to construction contractors. The litigious nature of American society arguably makes a commercial umbrella policy the most important kind of insurance policy that a business can purchase. But umbrella policies are unique in that they provide coverage after a primary policy has been exhausted by the payment of claims. This course examines various coverage concepts that are unique to umbrella policies, including the following: the various ways an umbrella policy might organize coverage; the scope of coverage provided by an umbrella policy insuring agreement; common limitations and restrictions imposed on contractors; the importance of examining the terms of the contractors limitations endorsement; how an umbrella policy’s attachment point may be adjusted over time; the meaning of follow form coverage and the areas of coverage in a contractor’s umbrella policy; how umbrella policy limits and self-insured retentions apply; the difference between horizontal and vertical exhaustion of policy limits; the conflicts between construction contract provisions and umbrella policy conditions; and the impact of a failure to maintaining underlying coverages.

This commercial insurance rating course is a basic course that is appropriate for those who buy insurance on behalf of construction firms, new entrants into the insurance industry, and as a refresher course for those who are familiar with rating processes. It provides an introduction to commercial property and casualty rating techniques and concepts, with an overview of the rating process in general. It also looks at important insurance advisory organizations and the statistical information they use to develop rates in many of the standard property and casualty lines. Significant attention is given to the rating of commercial auto, commercial general liability, workers compensation (including experience rating and retrospective rating), and commercial property insurance, including a consideration of the rating rules which most insurers follow when rating these coverage lines. Attention is given to several methods of rating umbrella insurance and also to contractors equipment and builders risk insurance, lines of coverage where rating is less structured than it is for commercial auto and workers compensation. For purposes of this course, it is less important that the student actually be able to rate an insurance policy than it is to understand the components of the rating process where errors often occur that lead to incorrect premiums. The overall goal is to provide adequate knowledge to know when to ask questions and to be able to ask them intelligently.