COMMERCIAL GENERAL LIABILITY
CG 20 10 ADDITIONAL INSURED ENDORSEMENT
You just received a big contract, in the terms and conditions the owner is requesting that you provide them a certificate of insurance naming them as additional insured. You might wonder to yourself what is that. It is simply an endorsement to your policy. The exact language of the endorsement is as follows:
This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Organization(s): Location(s) Of Covered Operations Information required to complete this Schedule, if not shown above, will be shown in the Declarations. A. Section II Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule, but only with respect to liability for “bodily injury”, “property damage” or “personal and advertising injury” caused, in whole or in part, by: 1. Your acts or omissions; or 2. The acts or omissions of those acting on your behalf; in the performance of your ongoing operations for the additional insured(s) at the location(s) designated above. B. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to “bodily injury” or “property damage” occurring after: 1. All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the location of the covered operations has been completed; or 2. That portion of “your work” out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project.
You might ask yourself what the heck does that mean. In reality, it is very simple. To get on a job, contractors often have to show proof of insurance and name the individuals hiring them as additional insureds on the contractors’ commercial general liability (CGL) policies. By doing this, the individuals hiring the contractors hope that the additional insured endorsement will defend them in case they get sued for something relating to the contractor’s work. Whether or not this is true depends on the additional insured endorsement.
The most common additional insured endorsement for contractors is the CG 20 10. The CG 20 10 covers the additional insured with respect to liability caused by your ongoing operations. “Ongoing operations” does not include completed operations. Therefore, the current form CG 20 10 does not include completed operations coverage for the additional insured.
Example of Ongoing Operations Occurrence
To understand this, think of a property owner hiring a contractor to replace the roof on a structure. While installing the new roof, the contractor drops loads of debris from the roof on top of a row of cars. This causes property damage arising out of the contractor’s ongoing operations. The car owners sue the property owner.
If the property owner was named as an additional insured on the contractor’s CGL policy using CG 20 10 , the property owner should be covered. This is because the CG 20 10 provides coverage for liability arising out of the named insured’s ongoing operations. If the property owner was named as an additional insured using the CG 20 10 they have coverage for ongoing operations, and this was an ongoing operations exposure.
Example of Completed Operations Occurrence
Say after 3 weeks after the contractor finishes the roof, falls off and lands on some cars. This is property damage out of the contractor’s completed operations. Once again, the car owners sue the property owner.
If the property owner was named as an additional insured using the current CG 20 10, the property owner would have not coverage for the completed operations exposure as this is not on going operations, as your completed work caused the damage. The property owner would not have coverage for the completed operations exposure under the contractor’s CGL policy. The current form CG 20 10 after 1985 does not provide coverage to the additional insured for completed operations. It only provides coverage for ongoing operations, and this was a completed operations exposure.
Blanket Additional Insured Endorsements
Blanket additional insured endorsements are endorsements that the insurance company provides to automatically add as additional insureds, those individuals or entities for whom the named insured is performing operations, and with whom the named insured has agreed in writing to name as an additional insured. A benefit of the blanket endorsement is insurance agencies can send out these endorsements without requesting permission from the insurance carriers underwriters, which sometimes can take days. This often makes the request for a certificate of insurance quicker to process. A requirement of getting a blanket additional insured is the written contract requirement saying you must name the owner as an additional insured. A blanket additional insured endorsement can added to your General Liability Insurance very easily. You do however need to be aware of this when comparing quotes. You need to make sure that blanket additional insureds are included when comparing quotes so you have an “apples to apples” comparison when comparing quotes.
By having blanket additional insured you can request to have all your clients or customer listed as additional insured on your policy with no additional charge. The cost to add additional insured varies by insurance company but can be as little as $250.00. In some policies the endorsement is included at no extra cost. Regardless of cost it is typically far cheaper to pay for the blanket additional insured as opposed to each required party. You need to make sure any quote you are given includes this endorsement. Especially on larger projects the number of entities you might need to list as additional insured can be significant.