Prequalifying subcontractors mitigates projects risks—expert

Prequalifying subcontractors mitigates projects risks—expert | Insurance Business America

Prequalifying subcontractors mitigates projects risks—expert
“Prequalifying subcontractors prior to contract award ensures they meet established and acceptable safety and health criteria,” explained Ronnie Uribe, vice president of risk at HUB International. Uribe is a veteran at risk control consulting. 

Among others, he explained that it is worth looking into the company’s experience modification rates (EMR) and doing a background check before signing on the dotted line with them.

Further, Uribe said, the following should be obtained to determine the suitability of a contractor:
  • injury and illness rates from the last five years
  • loss experience, which includes fatalities from the last five years
  • EMR from the past three years
  • the potential subcontractor’s safety and health program
  • certificates of insurance that includes additional terms and conditions
  • customer references from similar jobs
  • credentials of onsite safety person responsible for the job
  • OSHA citations for the past five years.
Uribe added that it is important to consider agreements over insurance coverage with the subcontractor once the contract is signed.

“Contractors’ standard agreements should contain a description of the required insurance and an indemnification clause. The indemnification clause automatically takes effect when the contract is signed, but the required insurance does not take effect automatically. It comes into existence only when the other party’s insurance company issues the required insurance policies or endorses existing policies to conform to the contractors’ requirements,” he explained.