If you are a general contractor, you want to be identified as an additional insured under your subcontractors’ CGL policies. This means you are owed a duty of defense and indemnification under a subcontractor’s policy for the negligence of the primary insured (the subcontractor). Yes, I am sure you know this, but you want to make sure you are an additional insured for BOTH ongoing operations and completed operations. You’d be surprised; most of the time, the additional insured endorsement in the CGL insurance policy is only for ongoing operations and not for completed operations which is when your post-completion latent defect claims are asserted.
Here is an example of a harsh lesson learned. A general contractor hired a concrete subcontractor for a condominium project. The subcontractor’s work was completed in late 2006 and the entire condominium project was completed in the summer of 2007. Post-completion, a construction defect dispute arose (shocking, right?) that involved the concrete subcontractor’s scope of work. The general contractor demanded that its concrete subcontractor’s CGL insurer indemnify and defend it in the dispute, which is what the general contractor should do. The subcontractor’s CGL insurer refused because the general contractor was only an additional insured for ongoing operations and not completed operations, such as when your latent defect claim occurs. An appellate court agreed with the CGL insurer because there was no additional insured coverage for the general contractor because the dispute arose out of completed operations.
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