NFP Q&A: Key Insurance Considerations In A Services Agreement

Certain provisions of an agreement may seem like boilerplate, but one shouldn't be skimming insurance provisions. Since a not-for-profit organization may find itself liable for the actions of its service providers, it is important that the organization ensure, in advance, that it is adequately insured for such liabilities. I asked my insurance colleague Kelly Morris some general questions to help not-for-profit organizations better understand insurance provisions in agreements provided by service providers.

Question:  What is the first thing an organization should consider when reviewing insurance provisions in an agreement from a service provider?

Kelly:  An organization should consider whether the agreement requires that the service provider maintain insurance coverage that is usual, both in terms of type of coverage and amount, for their industry during the term of the agreement, and whether the agreement requires that the service provider or the insurer advise