CIn

The topic of additional insured status is a difficult one at best. Manymisconceptions result when adding contracting parties to one an-other’s insurance policies as additional insureds. There is also thetug-of-war between insurers and indemnitors that want to limit thescope of additional insured coverage under their policies and the in-demnitees who want to maximize coverage under the policies of theindemnitors. Added to this, the interaction of additional insured sta-tus with indemnity clauses, insurance requirements, and other con-tract provisions is unique and complex. This session will examine thereasons for requiring, methods of achieving, and problems associat-ed with additional insured status under various policies.

Additional Insured Endorsements

#IRMI2016

1

opyright © 2016 International Risk Management stitute, Inc.

www.IRMI.com

Notes

This file is set up for duplexed printing. Therefore, there are pages that are intentionally leftblank. If you print this file, we suggest that you set your printer to duplex.

2

Additional Insured Endorsements

#IRMI2016

#IRMI2016

WHY MUST THEY

TORTURE ME?How One Little Piece of Paper

Changed an Industry

2

3

#IRMI2016

E&O

The ultimate “additional insured” endorsement

3

#IRMI2016

What Is(n’t) A Certificate Of Insurance?

• Informational snapshot only•Cannot modify a policy• Is not a contract (or is it?)

4

4

#IRMI2016

Three Types Of Certificate Desires

• I have a dream•Here’s what I’ll settle for•Deal-breaker

5

#IRMI2016

Four Types Of Certificate Requests

Uninsurable“Any”• Acts, errors, omissions• Any and all liabilities• Claims, costs, expenses, liabilities, penalties, fines

“Primary and Non-contributory”• What does non-contributory mean?• Non-CGL policies

“Equivalent” or “comparable”

6

5

#IRMI2016

Four Types Of Certificate Requests

Illegal

Non-existent coverage• Withdrawn endorsements• Transfer of sole negligence

Certificate modifications• Striking through / amending language / disclaimers• ACORD copyright violation• Statute, regulation or DOI directive violation

7

#IRMI2016

Four Types Of Certificate Requests

Inappropriate

• Cancellation notice• No longer provided• “Endeavor to” was a pipe dream

• Non-ACORD Certificates• Usually require company approval• Improper request or copyright infringement

8

6

#IRMI2016

Four Types Of Certificate Requests

Inappropriate

• Comprehensive General Liability• Comprehensive Automobile Liability• Agent attestation (“in the opinion of the agent, the policy

contains the required insurance coverages/indemnifications required by the contract with the insured”)

9

#IRMI2016

Four Types Of Certificate Requests

Impractical

• Unavailable or expensive• Completed operations, EIFS, pollution, subsidence, mold, etc.• No time to search market before certificate is due

10

7

#IRMI2016

Weird Requests

• “Ongoing operations”• “XYZ Corporation and its officers, directors, partners,

members, and employees”• “coverage to continue for (5) (10) years”• “x”, “c” and “u” exclusions removed• Blanket contractual liability• Broad form property damage

11

#IRMI2016

Other Issues

• Certificate limit v. policy limit• Impaired aggregates• Deductibles and SIRs• Defense within limits• Known loss or damage• Umbrella and excess policies• Copyright issues• Carrier agreements

“Your authority extends to issuance of standard, unalteredCertificates of Insurance (ACORD 24 or 25)”

12

8

#IRMI2016

Use The Proper Form

• ACORD Certificates• 20 Certificate of Aviation Liability Insurance• 21 Certificate of Aircraft Insurance• 22 Intermodal Interchange Certificate of Insurance• 23 Vehicle or Equipment Certificate of Insurance• 24 Certificate of Property Insurance• 25 Certificate of Liability Insurance• 27 Evidence of Property Insurance• 28 Evidence of Commercial Property Insurance• 29 Evidence of Flood Insurance• 30 Certificate of Garage Insurance• 31 Certificate of Marine/Energy Insurance

13

#IRMI2016

What You Should (and Should Not) Do

• DO provide a disclaimer to the insured and certificateholder• DO NOT exceed your legal or contractual authority• DO work with the insured’s attorney or minimize contract review• DO NOT modify an ACORD certificate• DO proof-read all certificates and perform periodic audits• DO establish a procedure for handling certificates• DO always send the entire certificate (both pages)• DO be judicious with the “big white box” – the FIG indicates

you should put “any exclusion endorsement or special policycondition”

14

9

#IRMI2016

What You Should (and Should Not) Do

• DO send copies of certificates to all insurers/MGAs/wholesalers• DO use the correct form• DO NOT use proprietary or non-ACORD forms without company

approval• DO NOT certify coverages that don’t exist • DO NOT indicate limits on a certificate that satisfy the request

when actual policy limits are higher• DO NOT sign any certification or attestation without

management approval

15

10

#IRMI2016

Additional Insured

Changes

16

#IRMI2016

2013 Changes

• 24 revised forms• Many changes are due to state “anti-indemnity” statutes• Coverage for AI is “only to the extent provided by law”• Coverage for the AI cannot be more broad than that provided to the Named

Insured• New forms

• CG 20 01 – Primary and Non-Contributory – Other Insurance Endorsement• Requires AI to be an NI on other available insurance• Written contract must state that our insured’s policy be primary and not seek contribution from

other insurance of the AI• CG 20 38 – Additional Insured – Owners, Lessees or Contractors – Automatic

Status for Other Parties When Required in Written Construction Contract Agreement

17

11

#IRMI2016

2013 Changes

18

#IRMI2016

2013 Changes

• 45 states have anti-indemnification statutes that restrict, modify, or invalidate indemnification agreements in construction and other contracts

• These statutes frequently prohibit the transfer of an indemnitee’ssole (or concurrent) negligence through an indemnification agreement

• ISO may be attempting to “genericize” the endorsement to conform to the various state laws without the need to create state-specific endorsements

• The ultimate impact of this change will remain unknown until ISO issues clarification or there are judicial decisions

19

12

#IRMI2016

2013 Changes

20

#IRMI2016

2013 Changes

21

13

#IRMI2016

Other Issues – Contractual Liability

22

#IRMI2016

Blanket Additional Insured Endorsements

• The use of blanket AI endorsements restricts the ability to provide notice of cancellation. When blanket endorsements are used, the insurer does not have a list of additional insureds or addresses. They are not aware of additional insureds' identities until a claim is made. Obviously insurers can't provide notice of cancellation to unidentified parties.

23

14

#IRMI2016

Blanket Additional Insured Endorsements

24

#IRMI2016

Resources

• Statutes and Regulation• www.iiaba.net/VU/NonMember/WilsonCertLawsRegs.htm

• Court Cases• www.iiaba.net/VU/NonMember/WilsonCertCourtCases.htm

25

15

Notes

This file is set up for duplexed printing. Therefore, there are pages that are intentionally leftblank. If you print this file, we suggest that you set your printer to duplex.

16