It denotes ownership on leases. It establishes liability on doctor forms. It validates checks. And it’s arguably the most important part of any contract or written agreement: your signature. Without it, documents are difficult—if not impossible—to dispute and enforce. And when it comes to certificates of insurance (COIs), an unsigned contract means no relationship has been defined, and the COI simply becomes a piece of paper.
So how can you mitigate the risk of receiving unsigned contracts?
Through blanket additional insured endorsements. As Dan M. Molyneaux, Jr., CPCU, ARM, Vice President of Molyneaux Risk Solutions, wrote in Blanket Provisions: The written agreement requirement, “The overwhelming majority of construction companies and larger, more sophisticated insureds have blanket provisions (think: automatic coverage).” And that leads to less unsigned contracts.
How? Blanket additional insured endorsements (also referred to as automatic additional insured endorsements) grant insured status to “all persons and organizations meeting a particular qualifying threshold (such as their requirement in a contract that they be made additional insureds), without having to be individually listed.” However, they’re required to have a written agreement.
In short, if you’re a third party with blanket provisions, you don’t need specifics because the coverage is all encompassing. But if there isn’t a signed agreement in place, they don’t have coverage. Molyneaux shares more basics in his blog.
In an ideal world, no contract would ever go unsigned. But in reality, contract negotiations are often postponed to get a project underway, leaving the terms and conditions in limbo and all parties at risk. So when it comes to unsigned contracts—whether you’re an owner, vendor, tenant, contractor, or subcontractor—it’s best to hammer out the details of a contract before breaking ground.