Do you know how to read a Certificate of Insurance? Lots of people who handle Certificates of Insurance never learned how to read them, but Certificates of Insurance offer key insights that you will need to understand to minimize your liability. Today, we’re welcoming back Phil Lukefahr, who serves as Senior Vice President within the Natural Resource Group at CAC Specialty.
In this episode of An Ounce of Prevention, Phil and Rachel discuss what Certificates of Insurance are, how to read them, and key sections of Certificates of Insurance to pay attention to. Rachel ends the episode by discussing Franklin v. Regions Bank, a recent ruling on lease extensions.
For more detailed show notes, navigate using the time stamps below:
[0:00] Introduction
[3:27] Certificates of Insurance are usually requested as proof that companies have the insurance they need to have. However, it is not a guarantee of future coverage. The certificate itself indicates this.
[5:04] The insurers listed to the right are a high-level summary of the insurance companies that will be expanded upon later in the form.
[7:20] The Commercial General Liability Coverage layer is the first million dollars of protection for any third-party bodily injury or property damage. The “primary layers” are general liability, commercial auto, and workers' compensation.
[10:12] Occurrences are any one loss, whereas your umbrella liability is an aggregate.
[11:25] What is the difference between excess and umbrella coverage? Phil says there basically is none. He typically calls the first tranche of umbrella coverage the umbrella, and everything else purchased afterwards is excess.
[14:14] What is the difference between additional insured and the certificate holder? A certificate holder can be someone you engage in an MSA with, or anybody who needs evidence that you are abiding by your contract. The named insured is the policy purchaser, and the additional insured is an endorsement that protects you from additional liability.
[19:01] Today’s case is a recent ruling from the Fifth Circuit Court of Appeals called
Franklin v. Regions Bank. This case stems from a leasing error on a mineral-rich property atop Louisiana’s Haynesville Shale, one of the most valuable natural gas formations in the U.S. The plaintiffs, two lessors, sued Regions Bank, the entity responsible for managing their mineral interests.
If you enjoyed this conversation and would like to discuss how RR&A’s Outsourced Legal Department can help your company, visit the R. Reese & Associates Website:
https://rreeselaw.com/
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Benjamin Franklin famously said that “An ounce of prevention is worth a pound of cure,” and we completely agree. On An Ounce of Prevention, Rachel Reese explores the legal developments affecting your business, helping you protect your interest and prevent legal trouble.
Rachel Reese, the Founder and CEO of R. Reese & Associates, draws on her many years of experience in energy law to bring you up-to-date information. She also interviews experts on their work, offering a wide range of perspectives on the intersection of law and energy.