Additional Insured Coverage

Additional insured endorsements can take several forms. The first is a scheduled endorsement that specifically identifies the General Contractor as an additional insureds. More commonly, however, subcontractors will rely on blanket additional insured endorsements, which automatically confer additional insured status on certain entities when specific requirements are met. Typical blanket additional insured endorsements require that the named insured (i.e., the subcontractor) agree in a written contract or agreement to include the General Contractor as an additional insured under the policy.

One pitfall is not clearly including the additional insured requirement in subcontracts. Many subcontracts will specify that the subcontractor provide certificates of insurance verifying that the contractor are additional insureds. While some courts have held this is sufficient to trigger coverage under a blanket additional insured endorsement, the better practice is to be specific and require that the subcontractor must add the General Contractor as an additional insured.

Some blanket additional insured endorsements require that the written contract be between the named insured and the additional insured (in legal terms, this is referred to as privity of contract). For the upstream party, this is often not a problem as the contractor will have entered into a written subcontract that requires that the contractor be included as an additional insured. If the additional insured endorsement on the subcontractor's policy requires that the subcontractor be in contractual privity with the additional insured, then the project owner may not be an additional insured, even if the contractor requires it in its subcontract. Thus, it is important that the contractor review a copy of the actual additional insured endorsement the subcontractor is using to ensure that it covers all of the required parties.