Blanket Language, Real Gaps: Vector Electric's Submission to Brightwater
Brightwater Construction is general contractor on a $48 million school project. The electrical subcontract requires Vector Electric to name Brightwater and the school district as additional insureds for ongoing and completed operations, to provide primary and non-contributory coverage, to waive subrogation, to give 30 days' notice of cancellation, and to carry $2 million per occurrence and $4 million aggregate.
Vector submits an ACORD 25 dated 04/02/2025 showing $1,000,000 each occurrence, $2,000,000 general aggregate, $2,000,000 products-completed operations aggregate, with the ADDL INSD and SUBR WVD columns marked "Y" and the cancellation clause stating 30 days. Attached are a blanket automatic additional insured endorsement triggered when a written construction agreement with Vector requires additional insured status, and a blanket waiver of subrogation endorsement.
Vector's broker says, "The blanket covers everything, you're fine." The subcontract also contains an indemnity clause requiring Vector to indemnify Brightwater for Brightwater's own negligence, and state law voids such clauses to the extent of the indemnitee's sole negligence. Electrical rough-in is complete on two of four buildings.
1. Does the submission satisfy the subcontract? Work through it requirement by requirement, and explain why the certificate's checkmarks are not the answer.
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Do not accept the checkmarks. The certificate is a producer's representation on a form that disclaims creating rights; the endorsements govern.
Limits: already non-compliant. $1 million/$2 million does not meet the required $2 million/$4 million. That alone is a written deficiency requiring a limit increase or a written waiver from Brightwater.
Additional insured - ongoing: likely satisfied by the blanket endorsement, but read the trigger. It is conditioned on a written construction agreement requiring additional insured status, so the executed subcontract must predate the loss and must actually contain that language. Confirm both parties are within the endorsement's definition of who qualifies; the school district may be a separate entity from Brightwater and may not fit the endorsement's description.
Additional insured - completed operations: the most common gap. Many automatic forms extend only to ongoing operations. Nothing in the submission establishes completed-operations status, and the products-completed operations aggregate line on the certificate proves nothing about who is an insured.
Primary and non-contributory: not established by a blanket additional insured endorsement alone. Look for express primary and non-contributory wording or a separate endorsement.
Waiver of subrogation: verify it applies to the district, not just the contractor, and that it is not limited to a narrower scope than the subcontract requires.
30 days' notice of cancellation: the certificate's cancellation clause is the certificate's own statement, not evidence of a policy endorsement. Check the policy condition.
2. Two years after substantial completion, a district employee is injured by an electrical panel Vector installed. How does the answer change, and what is Brightwater's position?
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The loss is now a completed-operations claim, which is exactly where the submission is thinnest. If the additional insured endorsement reaches ongoing operations only, neither Brightwater nor the district is an insured for this claim; they are strangers to Vector's policy and the carrier owes them no defense.
Brightwater's fallback is the contractual indemnity. That gets narrower under the anti-indemnity statute: the clause is void to the extent it would make Vector indemnify Brightwater for Brightwater's sole negligence, so Brightwater recovers only for Vector's own fault, and it must prove that fault itself. An indemnity claim is also an unsecured claim on Vector's balance sheet, not an insurance policy.
Capacity matters too. Completed-operations payments erode the products-completed operations aggregate, and a serious injury can consume the $2 million quickly, leaving nothing for later claimants.
Advice: before the work closes out, require a completed-operations additional insured endorsement, verify the products-completed operations aggregate is intact, and confirm primary and non-contributory wording continues to apply post-completion. If Vector cannot produce it, Brightwater should price the retained risk into the subcontract or require an owner's protective policy.
3. Brightwater's counsel says, "We're an additional insured, so Vector's policy answers for our exposure." Where does that reasoning fail?
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It fails on three fronts.
Scope: additional insured coverage under a construction endorsement responds to liability arising out of the named insured's operations or work. Brightwater's own independent acts - site safety coordination, scheduling, means and methods, supervising Vector - are not covered by Vector's policy. If Brightwater's superintendent directed the panel installation sequence, that exposure sits with Brightwater.
Limits: additional insured status adds insureds, not limits. Brightwater shares Vector's $1 million per occurrence and $2 million aggregate with Vector and every other insured. On a serious injury that is a thin cushion, and it erodes with each claim.
Direction of the obligation: the policy is a source of defense and indemnity, but the contractual indemnity is separate. Because state law voids indemnity for Brightwater's sole negligence, the insurance and the contract together leave Brightwater bearing its own negligence. That is a normal, expected allocation - not a gap to be papered over.
Tell the client plainly: the endorsements should be obtained and verified because they are worth real money, but they transfer Vector's risk, not Brightwater's. The producer's job is to say that in writing rather than to let a checkmark imply otherwise.