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From the Editor
"Ask an Expert" Briefs
Adding End Users as AIs to Manufacturers’ CGL Policies
Your insured, a manufacturer, sells products that a very large customer buys and uses. The customer wants to be an additional insured on the manufacturer’s policy. The underwriter says that’s not possible. They can add a vendor as an AI, but not an end user. Is this correct?
Additional Insured Status and Self-Insured Retentions Revisited
Does the CGL extend coverage to an Additional Insured on a primary and noncontributory basis when the lower tier contractor (the named insured) utilizes a self-insured retention (SIR)? Well, yes and no. Mostly no until it becomes yes. At least that’s what one court recently decided.
Be Careful What You Ask For…Some Disturbing Changes to ISO’s 2013 Additional Insured Endorsements
In 2013, ISO made some of the most significant revisions to its additional insured (AI) endorsements ever. Several of these revisions have given a number of industry experts pause as to how they may be interpreted by insurer claims personnel and the courts. This article attempts to enumerate those concerns.
Should AI Endorsements Be Sent to Additional Insureds?
Many, if not most, certificates of insurance identify one or more parties as additional insureds. However, with several hundred non-ISO AI endorsements in the marketplace, many of these forms provide significantly inferior AI coverage compared to ISO forms. So, just checking an AI box on the COI doesn’t tell anyone much of anything. So, should a copy of the actual endorsements (or other policy forms) be sent to the AIs?
Should CGL Deductibles or SIRS be Disclosed on Certificates of Insurance?
The ACORD 25 certificate of insurance has fields to show deductibles or self-insured retentions (SIRs) for excess and umbrella policies. However, there are no specific fields for this information for CGL policies. A recent court case indicates why failure to procure a “first-dollar” primary CGL policy or disclose an SIR could lead to problems.
Additional Insureds and Certificates
THIS MAY BE THE MOST IMPORTANT ARTICLE YOU READ THIS YEAR. If you insure contractors or others who must enter into agreements specifying insurance coverages and certificate language, you could be opening yourself up to lawsuits or, believe it or not, even worse. Learn how practices that many agents are involved in could be the ruin of their careers or even their agencies.
Additional Insureds vs. Additional Named Insureds
Sometimes a contract calls for naming a party as an additional insured. On other occasions, it requests additional named insured status. So, what's the difference and what are the advantages and disadvantages to the parties?
Blanket Additional Insured Coverage...A HUGE Exposure Gap
A written construction agreement exists between the insured contractor and a project owner that clearly requires additional insured (AI) status be extended to the owner, architect, construction manager, etc. The AI endorsement we're using appears to extend AI status ONLY to the party with which our insured directly contracted with.
Certificates of Insurance, Additional Insureds, and CGL Cross Liability Exclusions
A third party wants a lengthy list of additional insureds to be added to a certificate of insurance. After cajoling by the agency, the underwriter issues the AI endorsement but, along with it and over a dozen other requested endorsements, the underwriter attaches a 'cross liability exclusion' endorsement. What the agent doesn't realize is the potential coverage problem this form has just created.
CGL "Primary & Noncontributory" Certificate Requirements
Many, if not most, liability certificates require that contractors or other parties provide coverage that is 'primary and noncontributory.' These certificates are issued daily by agents attesting that the referenced CGL meets these requirements. However, is this really true? In this article, we'll take a look at the requirements and what is (or isn't) provided by the CGL policy.
CGL Additional Insureds...A Risky Business
Probably more than any other insurance policy, the CGL often is used to insure exposures that involve a multitude of parties. In many instances, a party will only enter into a contract or job if named an additional insured on the CGL policy of one or more other parties. Recently, our 'Ask an Expert' service received a question from an agent regarding this issue. This article seeks to identify the major pitfalls of relying on additional insured status under the CGL of another party.
CGL Contractual Liability, Additional Insured Status, Primary and Noncontributory, and Other Stuff You're Sick and Tired of Dealing With
An agent writes, 'Under the CGL contractual liability exclusion/coverage would the insured, a contractor, have coverage if he signs a construction contract that says he will provide primary and non-contributory coverage to the additional insured as per the written contract? A COI is required showing that coverage to the additional insured is primary and non-contributory.'
Completed Operations and the CG 20 10
Although we've written about this peripherally in the past, we still get questions monthly about the latest edition of the CG 20 10. When this endorsement was revised, ISO removed completed operations coverage. The coverage is still available, but not in THIS endorsement. To learn more, keep reading....
Contractual Liability vs. Additional Insured Status
Question: 'I have had discussions with agents who believe that the wording in the ISO CGL policy pertaining to an 'insured contract' covers the requirement to add additional insured status to a policy when required in a subcontractor's agreement. They attach a copy of that wording in place of the additional insured endorsement. Is this correct? If so, why are AI endorsements even needed?'
Insuring the Independent Contractor Exposure
Many businesses use independent contractors. While the 'principal' (owner) is usually not liable for the actions of an independent contractor, third parties can make claim or sue the owner on the basis that the work was inherently dangerous, the owner supplied defective tools or equipment, negligently hired or supervised the contractor, etc. Owners have at least four ways of protecting themselves for claims against them which arise out of an independent contractor's actions.
Insuring the Sole Negligence of Third Parties
In 2004, ISO refiled a number of additional insured endorsements that remove coverage for an additional insured's sole negligence. One of our readers has discovered that this is a major reduction in coverage and one that brings many insureds into conflict with construction and other contracts. In this article, we'll examine the issue and link to a companion article that reviews the endorsements themselves.
ISO's 2004 Additional Insured Endorsements
ISO at first filed new additional insured endorsements seeking to eliminate coverage for the AI's sole negligence. ISO then withdrew these endorsements and refiled revised versions. This article explains the reasons for this, along with the revised wording.
The "Primary and Noncontributory" Myth
Your customer has entered into a construction contract that requires, among many other things, for you to show on a certificate of insurance that additional insured coverage is provided on a primary and noncontributory basis. This article explains why it is typically impossible for you to do this.
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