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Additional-Insureds


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?
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.
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.
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?
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.
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?
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.
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?'
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.
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.
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