Concessioner Insurance: Understanding Your Requirements

Understanding insurance requirements and compliance can be complicated. This article answers some frequently asked questions and highlights some common areas of noncompliance.

How do I determine what type and amount of coverage I need?

Your concession contract identifies the types, minimum insurance coverage amounts, and insurance terms and conditions required under the contract. Concessioners are responsible for obtaining and maintaining insurance to meet these contract requirements and comply with applicable laws.

What happens during a concessioner insurance compliance check?

Insurance experts evaluate the contract, insurance coverage, the Certificate of Insurance, Evidence of Commercial Property Insurance, and other related documents. Although the concessioner insurance compliance review is managed by the Washington Area Support Office Commercial Services Program (WASO CSP), park concession specialists are involved in soliciting insurance certificates and other insurance information from their concessioners on an annual basis, reviewing compliance reports that are prepared and submitted to them from the insurance consultant, notifying concessioners of compliance deficiencies, and rating the concessioner’s compliance in this area.

What are some common areas of noncompliance?

The five most common areas of noncompliance regarding insurance include AM Best ratings, notices of cancellations, the inclusion of prohibited endorsements, “Any Auto” coverage, and umbrella coverage. Details for each of these commonly missed items can be found below. Each item must be included in the Certificate of Insurance (COI).

AM Best Rating:

Concessioners must understand the AM Best ratings when considering insurance carriers. AM Best assigns financial ratings to most property and casualty insurance carriers. Every concession contract includes a minimum AM Best rating of at least A- VII. To understand AM Best ratings and requirements, concessioners should refer to their contract and the AM Best website.

Because the contract requires a minimum AM Best rating, the rating must be included on the COI and the Evidence of Commercial Property Insurance (ECPI). Ensuring the rating information is on the COI and ECPI is a requirement and makes compliance reviews faster and easier for all parties.

Notice of Cancellation:

Per the insurance contract, the concessioner must provide the NPS with an unconditional notice of cancellation at least 30 days before the cancellation. Although the requirement is placed explicitly on the concessioner, the only way the concessioner can provide the required notice is if the insurance carrier offers notice to the concessioner. The insurance policy should contain an equivalent cancellation notice.

If the insurance carrier does not provide the NPS required language, the COI should contain the cancellation language taken directly from the policy. This is a commonly missed requirement found during a compliance review.

Prohibited Endorsements:

Within the commercial general liability (CGL) section of the NPS concessioner agreement, there is a list of four to eight prohibited endorsements. The COI must state whether any of the listed endorsements is attached to the policy. Note that the contract does not ask whether the base CGL contains specific exclusions related to the listed activities or exposures, only if any of the specifically listed endorsements are attached.

Symbol 1 - “Any Auto” Requirement:

The NPS contract requires the insured to provide auto liability coverage on an “Any Auto” basis; this means using Symbol 1. This symbol implies liability coverage is extended to include any automobile owned by, operated by, or used on behalf of the concessioner for which the concessioner could be held liable after an at-fault accident.

This level of coverage protects the concessioner from unexpected liability. For example, if an employee uses a personal vehicle to conduct business and is at fault for an accident, the concessioner can be held liable. If the concessioner acquires a new vehicle and forgets to notify insurance, under Symbol 1 coverage, the vehicle is covered.

Umbrella Coverage:

Excess, or “umbrella,” liability insurance is designed to protect against catastrophic losses and is generally written in addition to other primary liability policies such as general liability, automobile, and employer’s liability. Although this is not usually marked as non-compliant, the concessioner must note what assets the umbrella or excess coverage covers. Concessioners should note directly on the COI to which coverages the umbrella/excess coverage applies.
Understanding these five commonly flagged issues before and during compliance reviews is important for the park, the concessioner, the insurance expert conducting the review, and the insurance provider.

Who can I ask for help when it comes to insurance?

Understanding the requirements can be complex. Concessioners are encouraged to consult with insurance experts when choosing insurance, changing insurance policies, and understanding coverage. WASO CSP provides support to concessioners through insurance consultant experts, trainings, and online resources. In addition to individual consultations, WASO CSP periodically provides training to NPS concession specialists on insurance requirements through chats and other means.

For more information, please see the Commercial Recreational Service Insurance Requirements Guidance and Commercial Use Authorization Insurance Guidance.