The Contractor's Certificate of Insurance
Ridgeway Construction is the general contractor on a $4 million office renovation. It hires Summit Electrical as a subcontractor. Summit provides a certificate of insurance showing commercial general liability (CGL) limits of $1 million per occurrence and $2 million aggregate, workers' compensation, and auto liability. The certificate lists Ridgeway as an additional insured but does not include a waiver of subrogation or a completed operations endorsement. Mid-project, a Summit employee is injured and sues Ridgeway for negligent supervision, seeking $1.5 million. Separately, after Summit finishes, a faulty panel causes a fire causing $500,000 in damage. Ridgeway's own CGL has a $2 million occurrence limit and an aggregate of $4 million.
1. Analyze how the additional insured status affects Ridgeway's exposure to the employee's suit.
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The certificate shows Ridgeway as an additional insured, but the scope depends on the endorsement form, which the certificate does not establish. If the endorsement is limited to Summit's ongoing operations, Ridgeway is protected for liability arising out of Summit's work. The injured employee's suit against Ridgeway for negligent supervision is a direct claim; coverage may be excluded if the injury arises from Ridgeway's own negligence rather than Summit's operations. Workers' compensation immunity may also bar the employee's claim against Summit, but not necessarily against Ridgeway. Ridgeway's own CGL provides a backstop at $2 million per occurrence, which covers the $1.5 million claim if the additional insured coverage is unavailable. The judgment: confirm the endorsement language, tender the claim to Summit's insurer first, and rely on Ridgeway's own policy as excess or concurrent coverage.
2. Evaluate the completed operations gap after the fire.
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The certificate lacks a completed operations endorsement, so Summit's CGL may not cover the post-completion fire. Standard CGL policies include products-completed operations coverage, but the subcontract may require it explicitly. If Summit's policy excludes completed operations, Ridgeway's own CGL may respond, but its aggregate is reduced by prior claims. The $500,000 fire is within Ridgeway's $2 million occurrence limit, but the absence of a waiver of subrogation means Summit's insurer could pursue Ridgeway after paying. The practical fix: require completed operations coverage and a waiver of subrogation in every subcontract, and verify endorsements rather than relying on certificates.