The Zurich Insurance Group found in their “Risk Management In a Time of Uncertainty” report that a shocking number of business organizations still do not have a proactive risk management corporate strategy, but are instead reactive.
A staggering two-thirds of executives surveyed describe their company’s risk strategy as basic or reactive. Not surprising, the study found that companies with a dedicated Chief Risk Officer (CRO) fared better in every single risk department; information security, regulatory compliance, and loss.
Of course only mid to large size companies have the luxury of employing a full time CRO. One solution smaller companies are exploring is outsourcing the essential vendor management CRO functions to a 3rd party firm.
An outside firm that manages vendor insurance risk issues could attain many of the same results an in-house CRO would at a larger organization.
Simply by outsourcing the function of collecting and reviewing contractor insurance paperwork would go a long way to proactively screening contractors to ensure they meet your contract requirements.
Hold harmless language (a/k/a indemnity language) is found in most contracts and agreements, with the purpose of transferring the obligations of one party to another to defend and make whole the other party for legal liability, typically related to the services, work or nature of the contract.