CERTCON Services For The Energy Industry

As an oil and gas operator, do you really need a contract and certificate management program?

You really do. Because the operator will usually be held liable for any bodily injury claim. Even if he uses an independent contractor, he can still be held liable.

The greatest exposure is a contractor's employee getting hurt, collecting Workers' Compensation, and then suing the operator because he "failed to furnish a safe place to work." The Commercial General Liability (CGL) and Umbrella Liability policies usually cover these claims, but if you have frequent claims, your premiums will increase. Continuing to have them may make you uninsurable. And, if you have a large Self-Insured Retention, you are paying directly for these claims.

So, To Avoid:

• The loss of time, the cost, and the aggravation of litigation.
• The increasing cost of buying insurance.
• The possibility of becoming uninsurable.

Establish in a Master Service Agreement (MSA) who is responsible for each loss and ensure the other party has the correct insurance to back up its responsibilities.

There are four areas that must be addressed in order to have a successful MSA:

• Responsibility - Assignment of each party's obligations.
• Indemnification - Correctly worded to make it legally enforceable.
• Insurability - Complete insurance requirements to back up the indemnifications.
• Verification - Sufficient methods to ensure insurance requirements are met.

The first three areas ensure the contract works correctly. The fourth area ensures the insurance meets the specifications, requiring more knowledge than is shown on a standard certificate.

The Problem Is...

• Checking Certificates of Insurance correctly takes more expertise than most people think.
• Checking them completely, responding, and following up is extremely time-consuming.
• You must ensure the other party carries the required insurance, so your insurance—or you—do not pay claims expected to be covered by the other party.

Here Is What CertCon Will Do:

• Mail MSAs and requests for certificates of insurance, with follow-up notices if needed.
• Record all information for evaluation and notices.
• Forward MSAs to the client for execution, noting vendor changes.
• Analyze certificates of insurance for compliance with the MSA.
• Mail reports to vendors indicating compliance or non-compliance, requesting corrections.
• Monitor expiration dates and request renewals.
• Re-analyze revised certificates and send follow-up notices.
• Make information instantly available online to track vendor compliance.

Here Is What CertCon Web Report Information Will Indicate:

• Whether the vendor has signed a contract.
• Vendors making changes to their contracts.
• If changes affect insurance or indemnity provisions.
• If the vendor's insurance meets the MSA.
• Specific items of insurance in non-compliance.
• Non-compliance notices sent to vendors.
• Definitions of deficiencies in vendors' insurance.
• Vendors meeting accepted deviations.
• Insurance companies used by vendors.
• A.M. Best ratings and licenses of companies used by vendors.
• Workers' Compensation reports for audits.
• Plus other pertinent contractor/vendor information.