Additional Insured Endorsements and Contractual Risk Transfer
Additional Insured Endorsements and Contractual Risk Transfer
This domain tests the difference between an indemnity promise and insurance, and the endorsement language that determines whether a contractual transfer actually works.
Mechanics
- Additional insured status is only as broad as the endorsement: named versus blanket, ongoing versus completed operations, primary and non-contributory wording, waiver of subrogation.
- CG 20 10 covers owners, lessees or contractors for ongoing operations, limited to liability arising out of the named insured's work.
- CG 20 37 provides completed operations cover and is normally purchased alongside CG 20 10.
- CG 20 11 covers managers or lessors of premises.
- CG 20 33 grants automatic additional insured status where a written construction agreement requires it.
- CG 20 01 makes the policy primary and non-contributory for the additional insured.
- CG 24 04 waives subrogation against the required party.
- Anti-indemnity statutes in many states void indemnity for the indemnitee's own negligence, and some restrict additional insured endorsements on construction contracts.
Worked example
A general contractor's contract requires additional insured status for ongoing and completed operations, primary and non-contributory, with a waiver of subrogation. The subcontractor's certificate shows only CG 20 10. Two requirements fail: completed operations are not endorsed, and no primary and non-contributory endorsement exists. Defect claims arising years after the work are exactly where that gap causes loss.
Traps
Assuming a blanket additional insured endorsement reaches completed operations; confusing a waiver of subrogation with a waiver of the insurer's right to deny coverage; thinking an indemnity clause obligates the insurer; ignoring the 'arising out of' causal link that limits the endorsement.