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4 Jun, 2019

Additional Insured and Indemnification—Why have both?

2019-06-01T08:17:10-06:00June 4th, 2019|Additional insured coverage, Construction Contractor Advisor, Indemnity clauses|

Construction contracts typically require a subordinate contractor, either the general contractor subordinate to the owner or subcontractor subordinate to the general contractor, to list the upstream party as an additional insured and require the subordinate party to indemnify the upstream party for any claims or damages on the project.  The goal of these two provisions is to shift the risk of liability for injuries sustained by a subordinate party's employees [...]

28 Jul, 2016

Railroad Insurance – Derailment Covered!

2018-05-24T21:03:25-06:00July 28th, 2016|Additional insured coverage, Midwest Insurance Law Guide, Property and casualty, Railroad indemnity|

Like Peanut butter and Chocolate! Like Strawberries & Cream! Like Rum and Cokes at midnight on a hot summer night in the late 70's when cute boys with collar length hair who smelled faintly of Brut were driving muscle cars with one hand, taking a long drag on a Salem with the other, and searching for their favorite Eagles or Head East song on the A.M. radio station while I was happy in the passenger seat wearing [...]

12 Jan, 2016

It’s Another Whopper! Check Out This “Big Fish” Ruling From Wisconsin On Additional Insured Coverage

2018-05-24T21:05:56-06:00January 12th, 2016|Additional insured coverage, Midwest Insurance Law Guide|

Add this case to your Big Fish Basket!    A Wisconsin federal court recently ruled in Fleet & Farm of Green Bay, Inc. v. United Fire & Cas. Co., No. 13-C-1013, 2015 WL 2453110, at *3-5 (E.D. Wis. May 22, 2015) that an additional insured does have coverage for a loss that occurs when connected to - in any tenuous way - the named insured's business.  This state now joins the majority who [...]

8 Jun, 2015

RAILROAD ADDITIONAL INSURED COVERAGE

2018-04-23T20:59:42-06:00June 8th, 2015|Additional insured coverage, Commercial General Liability (CGL), Contract liability coverage, Midwest Insurance Law Guide|

 KEEPS CHUGGING ALONG... Railroads have been asking for additional insured coverage from their vendors, contractors and lessees for some time now.  The body of case law challenging that coverage is slowly building.  In the railroads' favor.  Let's take a look together at the most recent case for some additional nuggets of insight. In Norfolk Southern Ry Co., v. National Union Fire Ins. of Pittsburgh, PA, 999 F. Supp. 2d 906 (U.S. Dist. [...]

24 Feb, 2015

ADDITIONAL INSURED COVERAGE – DENIED!!

2018-04-23T20:59:42-06:00February 24th, 2015|Additional insured coverage, Contract liability coverage, Midwest Insurance Law Guide|

 There is a new case you should know about... In Re Deep Water Horizon ...only because everyone else is talking about it.   Let's break it down here, Dear Readers!  The Texas Supreme Court last week decided In Re Deepwater Horizon , No. 13-0670 (Tex. Sup. Ct. Feb. 13, 2015).  (Hover and click on the link above in order to access the court's decision). The court there rejected additional insured coverage for BP's losses due [...]

11 Jul, 2014

2 WAYS TO GET CGL INSURANCE COVERAGE – WITHOUT BUYING A POLICY

2018-04-23T20:59:42-06:00July 11th, 2014|Additional insured coverage, Commercial General Liability (CGL), Midwest Insurance Law Guide|

We are digging deep again today, dear Readers, into insurance coverage issues about which I think you ought to know.  How else am I going to train you to become scintillating cocktail party guests?  Everyone will be clamoring for your thoughts on this subject.  Trust me.   2 WAYS TO GET CGL INSURANCE COVERAGE - WITHOUT BUYING A POLICY 1.  As an additional insured by endorsement.   Under the standard ISO endorsement form, a [...]

17 Jun, 2014

OBSCURE – BUT IMPORTANT – COVERAGE RULES: LESSON TWO

2018-04-23T20:59:43-06:00June 17th, 2014|Additional insured coverage, Midwest Insurance Law Guide|

An Additional Insured May Not Be Covered for Employee Losses.    We are going to go deep today, my friends, into arcane insurance policy interpretation.  We will discuss how two insurance clauses can influence each other in order to to deny coverage. An additional insured by endorsement is an insured under the policy.  They are bound by all other policy terms and exclusions as is the named policyholder.  A standard exclusion in [...]

12 Dec, 2013

THE BOTTOM LINE: New CG 20 38 ADDITIONAL INSURED ENDORSEMENTS

2018-04-23T20:59:44-06:00December 12th, 2013|Additional insured coverage, Construction liability, Midwest Insurance Law Guide|

     ISO amended the 2013 form CG 20 38.  This form is used to add a blanket additional insured to a policy.  New terms limit coverage:      (T)he insurance afforded to such additional insured described above...Only applies to  the extent permitted by law.... (Emphasis added).      What does this mean?  The committee added these terms to incorporate laws recently enacted in certain states that limit indemnity or prohibit it altogether between parties.  Despite [...]

1 Dec, 2013

BOTTOM LINE: Can a Policy Refer to A Third Party Contract?

2018-04-23T20:59:44-06:00December 1st, 2013|Additional insured coverage, Indemnity clauses, Midwest Insurance Law Guide|

     2013 ISO form changes for Additional Insured Endorsements try to limit coverage to an indemnity agreement. The insurance afforded to such additional insured described above...Will not be broader than that which you are required by the contract or agreement to provide for such additional insured.  Is this enforceable?   Referring to a third party contract as a means to dictate coverage terms could possibly be a violation of state insurance regulations.  After all, the third [...]

5 Nov, 2013

INSURANCE POLICY RISK TRANSFERENCE – 2 WAYS

2018-04-23T20:59:44-06:00November 5th, 2013|Additional insured coverage, Commercial General Liability (CGL), Contract liability coverage, Indemnity clauses, Midwest Insurance Law Guide, Risk transference|

How does a policyholder enforce a contract in which one party assumes the risk of another?    Let's break it down two ways: By additional insured (AI) endorsement.  AI is an insured. Insurer owes AI fiduciary duties. AI must follow policy terms for coverage. AI does not need to have a written contract with Named Insured for coverage to apply. In most states, AI coverage will include negligent acts of AI in addition to [...]

18 Sep, 2013

Contractual Liability Coverage v. Additional Insured Endorsement

2018-04-23T20:59:44-06:00September 18th, 2013|Additional insured coverage, Commercial General Liability (CGL), Contract liability coverage, Midwest Insurance Law Guide|

Contractual liability coverage is excluded in a standard CGL policy. However the policy makes an exception - or gives coverage back - to Named Insureds who assume the tort liability of another party in an "insured contract" to pay for damages that occur after the policy is issued.  (See, Section I, ¶2. Exclusions, B. 2.)   An "insured contract" excludes operations within 50 feet of any railroad operations, but this coverage can be added [...]

3 Aug, 2013

BELT + BRACES = RISK TRANSFERENCE

2018-04-23T20:59:44-06:00August 3rd, 2013|Additional insured coverage, Commercial General Liability (CGL), Contract liability coverage, Midwest Insurance Law Guide, Risk transference|

The best way to protect a client from legal liability and to transfer risk to another company is the belt and braces approach.  A "belt" is a well crafted indemnity clause where one party (indemnitor) promises to hold the other (indemnitee) harmless for any and all losses arising out of, or connected to, the indemnitor's work. An example is when a sub-contractor promises to hold a contractor harmless for loss or damages which occur when [...]

13 Jul, 2013

ADDITIONAL INSUREDS: KNOW YOUR STATE LAWS!

2018-04-23T20:59:44-06:00July 13th, 2013|Additional insured coverage, Contract liability coverage, Midwest Insurance Law Guide, Policyholder, Railroad indemnity|

6 STATES BAR CONTRACTUAL INDEMNITY FOR ADDITIONAL INSUREDS Colorado.  See, Colo. Stat.  § 13-21-111.5  (except for railroads); Georgia.  See, Ga. Code § 13-8-2  (but allows hold harmless clauses in an insuring contract); Montana.  See, Mont. Rev. Code § 28-2-2111; New Mexico.  See, N.M. Stat. § 56-7-1 (prohibits requirements to "insure or defend" but allows OCIP and limited indemnity clauses); Oklahoma.   See, Okla. Stat. § 15-221; Oregon.   See, Or. Rev. Stat.  §30.140  (prohibits subcontractor's [...]

8 May, 2013

ADDITIONAL INSURED ENDORSEMENT: Coverage Is Not Dependent Upon Indemnity Clause in Underlying Contract

2018-04-23T20:59:44-06:00May 8th, 2013|Additional insured coverage, Contract liability coverage, Midwest Insurance Law Guide|

In a recent Nebraska case, Federated Service Ins. Co. v. Alliance Const., LLC, 282 Neb. 638, 646 (2011), the Supreme Court issued a seminal ruling that affects additional insured endorsements written in that state. In Federated, a subcontractor agreed in a written contract to add a general contractor as an additional insured to the sub’s insurance policy.  The parties also had a separate indemnity clause in the contract whereby the sub [...]

15 Mar, 2013

3 STEPS TO RAILROAD RISK TRANSFERENCE

2018-04-23T20:59:45-06:00March 15th, 2013|Additional insured coverage, Indemnity clauses, Insurance contract, Midwest Insurance Law Guide, Railroad endorsement, Railroad indemnity, Railroad protective insurance coverage, Risk transference|

There are three essential steps to railroad risk transference through insurance: 1.     Add an indemnity clause to all contracts making clear that you are asking for indemnity for the contractor's or vendor's negligence.   If you do intend to seek indemnity for the railroad's negligence too, this language needs to be clear and unequivocal in order to adhere to most states' requirements.  Not all states allow exculpatory indemnity.  (I will write more about this later.  [...]

14 Mar, 2013

HOW TO GET INDEMNITY IN A CONSTRUCTION CONTRACT

2018-04-23T20:59:45-06:00March 14th, 2013|Additional insured coverage, Commercial General Liability (CGL), Construction liability, Contract liability coverage, Indemnity clauses, Midwest Insurance Law Guide|

Most Midwest states have specific statutes that bar one party from asking for indemnity from another party in a construction related contract.  Iowa, Kansas and Missouri do not.  However, Nebraska, North Dakota, South Dakota and Minnesota do. All parties to any contract that involves any type of construction or design must be aware of these statutes.  If not, your AIA or other contract provisions on indemnity may not be upheld or enforceable in a court of law.  This is [...]

8 Mar, 2013

HOW TO PROPERLY INSURE A CONSTRUCTION PROJECT

2018-04-23T20:59:45-06:00March 8th, 2013|Additional insured coverage, Construction liability, Construction subrogation, Indemnity clauses, Insurance contract, Midwest Insurance Law Guide|

  Here are three simple rules for obtaining indemnity and insurance on a construction project if you are the owner or the General Contractor. #1.  Make all subcontractors add you as an additional insured on their CGL policies by endorsement.  Insist upon the ISO 1985 version, which would cover you for losses incurred even if it is your fault.  This is the broadest form available. #2.  Draft a contract with the subs that contains two separate clauses:  one [...]

7 Mar, 2013

WHAT RAILROADS SHOULD KNOW ABOUT BEING AN ADDITONAL INSURED BY CONTRACT

2018-04-23T20:59:45-06:00March 7th, 2013|Additional insured coverage, Commercial General Liability (CGL), Contract liability coverage, Indemnity clauses, Midwest Insurance Law Guide, Railroad endorsement, Railroad indemnity|

Railroads can be covered for losses caused in whole or in part by a contractor.  If a railroad is added to the contractor’s Commercial General Liability (CGL) insurance policy as an additional insured, all losses which arise out of the contractor’s work should be covered. The case of Cont’l Cas. Co. v. Auto-Owners Ins. Co., 238 F.3d 941, 944 (8th Cir. 2000) explains this concept of risk transference.  There, Burlington Northern R.R. Co. contracted with [...]

25 Jan, 2013

EXTENDING ADDITIONAL INSURED COVERAGE BY COURT OPINION

2018-04-23T20:59:45-06:00January 25th, 2013|Additional insured coverage, Commercial General Liability (CGL), Complex insurance coverage, Contract liability coverage, Indemnity clauses, Insurance contract, Midwest Insurance Law Guide, Property and casualty|

I often discuss the role of the courts in broadening coverage for additional insureds in a Commercial General Insurance (CGL) policy.  Here is another case where a court has extending coverage – probably well beyond what the underwriter intended at the time the policy was issued.   In the case of Evanston Ins. Co. v. ATOFINA Petrochemicals, Inc., 256 S.W.3d 660, 666 (Tex. 2008), ATOFINA contracted with Triple S Industrial [...]

4 Jan, 2013

WHO IS AN ADDITIONAL INSURED?

2018-04-23T20:59:45-06:00January 4th, 2013|Additional insured coverage, Commercial General Liability (CGL), Contract liability coverage, Indemnity clauses, Midwest Insurance Law Guide|

Adding another company as an Additional Insured under your own Commercial General Liability (CGL) policy is a common practice.  The addition protects that other entity against your company’s negligence.  The coverage is almost always limited to “your” work, meaning the work being performed by the Named Insured, not the Additional Insured. This is commonly done in conjunction with an indemnity agreement between the parties.   Additional Insured status is a method [...]

20 Dec, 2012

COURTS HAVE BROADENED COVERAGE FOR AN ADDITIONAL INSURED

2018-04-23T20:59:46-06:00December 20th, 2012|Additional insured coverage, Midwest Insurance Law Guide|

Most states have adopted a broad interpretation of coverage for losses suffered by an Additional Insured.   Traditionally, Additional Insureds are added to policies by an agreement with the policyholder.  Coverage for losses incurred by an Additional Insured is generally limited under a standard ISO endorsement.  The endorsement amends the “Who Is An Insured” section of the policy.  The endorsement adds those who “you” have agreed to indemnify by contract, [...]

13 Dec, 2012

COVERAGE FOR AN ADDITIONAL INSURED

2018-04-23T20:59:46-06:00December 13th, 2012|Additional insured coverage, Midwest Insurance Law Guide|

Today let’s talk about the role of an additional insured under a typical Commercial General Liability (CGL) insurance policy.  I handle legal issues concerning Additional Insureds almost daily in my practice.  Business agreements in this past decade have increasingly been requiring one party or the other to add an Additional Insured to their CGL policy.  For this reason we often handle litigation enforcing such clauses when a loss arises out [...]