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4 Jun, 2019

Additional Insured and Indemnification—Why have both?

2019-06-01T08:17:10-05:00June 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 [...]

1 Dec, 2013

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

2018-04-23T20:59:44-05:00December 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

2018-04-23T20:59:44-05:00November 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 [...]

23 Mar, 2013

Beware Anti-Indemnity Statutes

2018-04-23T20:59:45-05:00March 23rd, 2013|Indemnity clauses, Midwest Insurance Law Guide|

Most Midwest states have a statute the bars indemnity for construction related projects. 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, AIA or other standard contract provisions on indemnity may not be upheld or enforceable in a court of law. Is there [...]

15 Mar, 2013

3 STEPS TO RAILROAD RISK TRANSFERENCE

2018-04-23T20:59:45-05:00March 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

2018-04-23T20:59:45-05:00March 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

2018-04-23T20:59:45-05:00March 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

2018-04-23T20:59:45-05:00March 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

2018-04-23T20:59:45-05:00January 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?

2018-04-23T20:59:45-05:00January 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 [...]