Suing a CGL Insurer when You are Not the Primary Insured

Previously, I explained the importance of being an additional insured both for ongoing operations and completed operations. Again, if you are an owner, you want to be an additional insured under your general contractor’s CGL policy (and even the subcontractors’ CGL policies). And, if you are a general contractor, you want to be an additional insured under your subcontractors’ CGL policies.

If you are an insured under the policy, whether the primary insured or additional insured, you can pursue a claim directly against the insurer (such as when the insurer denies coverage and/or refuses to tender a defense).

If you are not an insured, however, you cannot sue another’s CGL policy without first obtaining a settlement or verdict against the policy’s insured.

How would this come into play? Say you are a general contractor and want to sue a subcontractor for construction defects. The subcontractor’s insurer denies coverage and you are not an additional insured under that subcontractor’s policy. You cannot sue the subcontractor’s policy right off the bat for coverage without first obtaining a settlement or verdict against the subcontractor-insured. The reason being is that you are not an insured under that policy.

Now, let’s take this one step further. Say the general contractor in the example above is an additional insured under its subcontractor’s policy and the subcontractor’s insurer denied coverage. The general contractor typically cannot sue both the subcontractor-insured and insurer in the same lawsuit. The general contractor’s claim against the insurer for coverage, even though the general contractor is an additional insured, should be stayed or severed from the general contractor’s claim against the subcontractor-insured. This is referred to as the non-joinder rule because it would be prejudicial to the subcontractor-insured to sue it in the same lawsuit as a coverage lawsuit since the jury would know about the availability of insurance.

Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.


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