Be sure your insurer understands your new operational configuration and has solutions within at least the same boundaries as before you outsourced. You will need to consider all outsourced services as branches of your own offices and operations. Coverage for each function should be analyzed and insured by you if not by your outsourced service provider.
Gone are the days of Digital, Wang, Prime, Cullinet, Apollo, Data General, among other technology giants; the current profile of Massachusetts’ technology business is smaller components manufacturers, software shops, middle industry parts and service providers. With local tech companies on the short-end of the contract stick, managing risks and exposures is increasingly important. A review of both your contracts and increased risks should be undertaken, with strategies to limit those risks. If contractual limitations are impossible, other means, such as transfer to your insurer, should be fully utilized.
Your commercial insurance program probably does cover:
- Waiver of subrogation against your landlord — your lease is usually covered under “Limited Contractual” coverage
- General liability obligations required under most contracts for standard limits (including Bodily Injury and Property Damage)
- Workers Compensation coverage for most contractual obligation language
- Most “hold harmless” clauses found in leases.
Your commercial insurance program probably does NOT cover:
- Intellectual property infringement indemnification
- Employee non-disclosure agreements
- Indemnification for your landlord’s building contractors
- Most “any and all causes” clauses
- “Your insurer will honor all the terms of this contract” language provisions