Curious additional insured question

[rcenters]

I haven't had to deal with this in 4 years(since I've been working with Truckers since that time and not contractors), but I remembered this issue I once had and was wondering if I am right about it - or not.

For example- the CG 2010 additional insured endorsement is TITLED "Owners, lesses or contractors". Within the body of the endorsement, it says "Who is an insured is amended to include as an additional insured the person(s) or organizations(s) shown in the schedule...".

As you know, a common tactic of blanketing the endorsement bby carriers is to simply write "any person or organization where required by written contract" in the space above that language. My question therefore, stems from the fact that a carrier once told us that we could not assert the CG2010 endorsement in order to name engineers, architects, etc as additional insured on a certificate. Rather than argue we complied with their recommendation to simply send an endorsement request to schedule the engineer/architect on another form; but I have always thought that the TITLE of the endorsement does not constitute part of the policy contractual language itself, and therefore, that this endorsement CAN extend additional insured status to entities other than Owners/Lessees/Contractors, because all the other language in the endorsement says ANY person or organization.

Would I be right to think this?

[LadyBroker]

No, I think you are asking for trouble if you try to add an Architect onto a policy with that logic. The title of the endorsement is Owners, Lessees or Contractors, so that's where you add those classes. There are other Additional Insured endorsements to handle other AI exposures.

[rcenters]

Personally I wonder if this is an attempt by the carrier to steer you to putting the other endorsement on the policy because the other endorsement happens to have stronger professional liability exclusions, but does that mean if you don't, the original endorsement won't apply? But I guess the ultimate answer to this, at least in the spirit I am trying to ask it, is a matter of obtaining legal advice state by state as to what a court would say if confronted with this issue. Therefore, as insurance agents I guess we have to take the approach of, if it is ambiguous or we're unsure, to try to attach endorsements that will rectify the ambiguity, even if that's extra work.

I at least understand this, and know what endorsements to request to ensure coverage(even if it is extra work), but what do you do as far as training certificate issuing personnel to understand this as well? Most carriers do not review certs and will NOT warn our reps that this is a recommended course of action, so how do you ensure your agency personnel are proficient in this without that backstop? Keep in mind that *I* am completely outside the certificate chain of command now and would not ever be consulted on this at my agency, but I am interested nonetheless since 50% of the certs are evidence of coverage only and therefore, seemingly, a clerical task, and delegated to personnel with that level of insurance knowledge. Thoughts?

[DarrenR]

I don't insure contractors, but my guess is these parties are not covered under the blanket additional insured endorsement because contracts with architects and engineers are not insured contracts.

[rcenters]

To the best I can tell the CG 0001 form excludes contracts from indemnifying engineers and architects from indemnification for their professional activities, but not ALL indemnification. You may notice if you read the CG 2007 07 04 endorsement for Engineers, Architects and Surveyors, that while it does amend the Who isan insured provision, it does not amend the definition of insured contract provision.

But as I said I guess we're getting into an area where even as agents, we'd have to consult an attorney if we wanted to understand the applicability of this issue.

Contractual liability and extension of "insured" status are not the same thing, either.

[mrswjs]

I think you will find that the answer to this is not only unclear, but you will get a different answer no matter who you ask. I am in construction and deal with this every day. Typically, the certificates are going to have to name the GC, Owner & Engineer on one certificate as additional insured. Though they are different entities, the certificate is in the name of the GC and names the additional parties "as required by written contract". If you are writing through a major carrier who is familiar with construction accounts - they typically have their own filed AI form included products & completed ops for the AI.

[LadyBroker]

The theme I am picking up in this chat is that as agents, you want to decide what endorsements to attach? I think that's a little dangerous, even if you don't agree with the carrier's interpretations.

If you have an Architect or Engineer that you need to add to the policy as an AI, call the carrier, call your wholesaler, call your marketing rep and ask them what to do. Do not just decide that it 'should' be or 'might' be covered under something and issue a cert. Of course, you can do that, as long as your Insurance Agent's E & O is in place!

With regards to the construction accounts, it is possible to get the A & E's included as an AI, but in my experience, the carriers who will do it charge for it, and ask for proof that the firm or individual has Professional Liability in place.

[etimer]

Recently I've had a few AI requests with names that lend no indication of who or what they do. Such as name Freedom House as an AI. Plus sometimes the subs start work for someone named an AI and no contracts have been signed.

I'm thinking of sending this along with COI's that want AI status. It is from the insurance company Broad Form Additional Insured Endorsement.

A few paragraphs to keep in mind about Additional Insured status.

(4) Any person or organization, other than a joint venture, for whom you have agreed by written contract to provide "bodily injury" or "property damage" liability insurance, but only for liability arising out of or caused, in whole or in part, by operation(s) performed by you or on your behalf, provided that:

(a) This subparagraph (4) does not apply to any agreement to provide insurance to:

(i) Any "employee", association of "employees" or labor union, except with respect to work performed by or for you or for such "employee", association of "employees" or labor union under direct contract between you as contractor and such "employee", association of "employees" or labor union as owners;

(ii) Any railroad company except with respect to work performed by you or for you for such railroad company under direct contract or agreement between you and such railroad company;

(iii) Any person or organization whose profession, business or occupation is that of an architect, surveyor or engineer with respect to liability arising out of preparation or approval of maps, drawings, opinions, reports, surveys, change orders, designs or specifications; giving directions or instructions; failing to give directions or instructions; or the performance of any other professional services by such person or organization;

(iv) Any of your contractors or subcontractors or any partner, officer, agent or "employee" of such contractors or subcontractors; and

(v) Anyone described in paragraphs e. (1) through (3) above.

(b) If a vendor of "your products" is an additional insured under this Coverage Form, such insurance as provided to the additional insured applies only with respect to "bodily injury" or "property damage" arising out of "your products" which are distributed or sold in the regular course of the vendor's business and subject to the following additional exclusions.


Whoa...I gotta get off, big thunderstorm crack that shook the walls.

[jyoung53559]

I agree I always check with our underwriting department to make sure what I want to do when and insured asked that another party wants to be added as a AI....this is because in some cases they really do not have an insurable interest with respect to what our insured is doing for them and they in some cases just wanting to "piggy-back" on our insurance.....and it could open up a can of worms should a claim be filed....that is not the time to find out of your E&O is any good.....

John

[rcenters]

Keep in mind that I was not asking this so that I can get around our carrier's advices or anything like. More to the point, I simply feel that if the verbiage of the endorsement is taken literally(which is how a court would take it, I hope, if it came to that) that the additional insured endorsement's language, despite the title itself, the verbiage of the endorsement does not limit to specific entities, so it could indeed apply to just about anything. I'm just trying to gauge whether my ability to interpret/undestand the wording is correct - just to see if I'm right for my own purposes. For actual agency procedures, yes you should go the extra step of adding the right endorsement(s) to be 110% sure, even if it risks creating a bit of redundancy.

In Etimer's example it seems clear to me that the AI status does not extend "to liability arising out of preparation or approval of maps, drawings, opinions, reports, surveys, change orders, designs or specifications; giving directions or instructions; failing to give directions or instructions; or the performance of any other professional services by such person or organization", but would still extend additional insured status for an unrelated error made by a sub that causes everyone, including the architect or engineer, to be sued(say, a sub left a broom out and someone tripped on it, and sued everyone on the jobsite). But then, I could start all over again by asking if you all agree with this assertion!