Between the Lines

A Discussion of Case Law and Statutory Law Affecting Commercial Lines of Insurance


New Form Makes Reducing Construction Risk a Bit Easier

1.11.08 by elleinad., on Flickr

An Easier Way to Reduce Risk
CC by elleinad

Good news for owners, developers, contractors and others involved with construction industry risk management: a new ISO form endorsement adds coverage not just for any one you agree to add as an additional insured in a construction contract with them, but also for anyone the contract requires you to as an additional insured, even if they are not a party to the contract.

(ISO is the Insurance Services Office, Inc.  It creates forms that many insurance companies use for certain types of coverage, including commercial general liability.  But if you’ve read this far you probably already knew that.)

ISO has filed new editions of some of its forms with state insurance regulators for use starting in April 2013, including the additional insured endorsement described above.  This means that the complicated task of coordinating the various players’ contractual indemnity and insurance obligations and their corresponding insurance coverage in a construction project just got a little bit easier.  If a contract between the general contractor and a subcontractor requires the subcontractor to add the contractor and the owner as additional insureds, this new form automatically adds the owner, even if he or she is not a party to the subcontract.  Case law in some jurisdictions held that, under prior forms, only parties to the subcontract were added.

But there’s a catch.  ISO’s new additional insured endorsements include one that has this language (form number CG 20 38 04 13) and one that does not (CG 20 33 04 13).  So it’s important to check your policy (or your subcontractors’ policies) to be sure it has the right form.  Better yet, put it in the subcontracts that the subcontractors are required to add the contractor and the owner as additional insureds using ISO form number CG 20 38 04 13 or its equivalent.  And then check the subcontractors’ policies. (No, getting a certificate of insurance from the subcontractor is not enough.  But if you’ve read this far you already knew that.)

About Harvey:  I specialize in Insurance Law and Litigation at Anderson & Kreiger.   I recently won an insurance case in the First Circuit, which established useful new law concerning indemnification requirements for settlements.  I blogged about that case for Between the Lines here.

About the Author

Harvey Nosowitz

Posted In: Additional Insureds

Find an Attorney