I have numerous postings regarding additional insured status because it is such a vital component of risk management on construction projects. (See here and here for example.) Just because you are an additional insured under a primary insured’s CGL policy, however, doesn’t mean you are automatically an insured under that policy. If a general contractor is an additional insured under a subcontractor’s CGL policy, this means the general contractor is an additional insured for claims arising out of the negligence of the (primary insured) subcontractor.
CGL policies contain an additional insured endorsement. The additional insured endorsement may say something to the effect that the additional insured is only an additional insured with respect to liability directly attributable to the primary insured’s performance.
For instance, a condominium hired a general contractor and the general contractor named the association as an additional insured under its CGL policy. A unit owner hurt herself during the general contractor’s work. The unit owner sued the association and the general contractor. As it pertains to the association, the unit owner argued that the association was negligent in hiring the general contractor. The association tendered the defense to the general contractor’s CGL insurer as an additional insured under the policy but the CGL insurer denied a defense. The association then sued the general contractor’s CGL insurer. However, the court held that the association did not qualify as an additional insured because the association was not being sued for negligence directly attributable to the general contractor’s work, but was instead, being sued for the negligence of the association in hiring the general contractor.
Remember, being an additional insured pertains to the negligence or actions of the primary insured. Additional insured status comes into play if there are claims asserted against you attributable to the negligence of the primary insured (for which you are an additional insured under that policy).
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