If you are an owner, you want the general contractor (and even subcontractors) to name you as an additional insured in their commercial general liability (CGL) policies. Similarly, if you a general contractor, you want subcontractors to name you as an additional insured in their CGL policies. You want to be named as an additional insured for both ongoing operations and, importantly, completed operations (post-completion and your latent defect scenario). The best way to determine if you are identified as an additional insured is not from a Certificate of Insurance, but from the policy itself and the additional insured endorsement page in the policy.
Being an additional insured is intended to protect you–the additional insured–from third-party actions attributed to the negligence of the primary insured. As an additional insured, the primary insured’s CGL policy needs to defend and indemnify the additional insured from third-party claims attributed to the negligence of the primary insured.
For instance, in a construction defect scenario, assume an owner sues its general contractor for roof and window defects / leaks that caused water damage to its property. The general contractor will sue its roofer and glazer in a third-party action. The general contractor will also claim, as it should, that because it is an additional insured (hopefully) under the subcontractors’ CGL policies, and because the owner’s claim is attributed to the negligence caused by the subcontractors, the subcontractor’s CGL carriers are required to share in the general contractor’s defense costs and indemnify the general contractor from the owner’s damage.
If you have questions with additional insured status, please consult with counsel because being named as an additional insured is an important part of construction risk management. It is important to know your rights as an additional insured.
Please contact David Adelstein at firstname.lastname@example.org or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.