Vendor Risk Management By Kristina Peterson, Director of Underwriting, SDPAA Many public entities sponsor events and functions which involve outside vendors. And, many entities allow their facilities and/or property to be utilized by an outside party for an event or function which may include vendors. To protect the entity it is important to transfer as much of the risk of the function or event as possible and to ensure outside parties, including vendors, are responsible for the risks associated with their participation in the function or event. In addition to the entity utilizing a Facilities Use Agreement and requiring the appropriate insurance coverage, hold harmless/indemnification language, and waivers (if appropriate) of the user, it is important that the risks presented by the vendor be evaluated and appropriate risk management requirements met. Once you have completed your evaluation of the risks, you may find that minimal requirements are warranted. However, if you determine the risks associated with the activities, goods or services being provided by the vendor are such that protection of your entity is appropriate, we recommend the following risk transfer methods be utilized: j Evidence of a minimum of $1,000,000 in general liability insurance coverage of the vendor with a Certificate of Insurance to be provided to the entity with the entity being named an additional insured. j Evidence of a minimum of $500,000 in auto liability insurance coverage of the vendor with a Certificate of Insurance to be provided to the entity with the entity being named an additional insured. j Agreement to maintain workers’ compensation and employers’ liability insurance as required by South Dakota law. j Agreement in which the vendor agrees to hold harmless and indemnify the entity as appropriate (sample language can be found on our website).
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Vendors may have a policy or coverage in place and be able to provide evidence of liability coverage. Other vendors may ask for assistance in finding coverage. There are several ways to obtain coverage. One is to apply for event coverage. Two companies that offer this type of coverage are the TULIP Program and the Alliant Special Event Program. Both offer a $1,000,000 general liability limit and add the public entity as an additional insured. Both have an application online and the premium can be paid online as well. Websites with additional information for these programs is below. TULIP: www.onebeaconentertainment.com. Alliant Special Event Program: https://specialevents. alliantinsurance.com/Authentication/Default.aspx?Return Url=%2fdefault.aspx. SDPAA is always available to discuss risk management issues associated with your event and to assist with loss control measures and sample language or recommendations. Contact our office at 800.658.3633 to talk with a staff member about your event.
SOUTH DAKOTA MUNICIPALITIES
