Additional insured status on a contractor’s CGL policy is most beneficial for claims involving bodily injury to construction workers, but it may also provide protection from third-party or non-worker bodily injury or property damage claims. In these instances, architects and engineers may benefit from having the contractor’s CGL policy provide them with a defense that is not subject to a deductible and does not reduce the limit of their professional liability insurance policy.
Standard form agreements, such as AIA document A201-2007 (General Conditions of the Contract for Construction) and EJCDC document C-700 (Standard General Conditions of the Construction Contract), require that architects and engineers be named as additional insureds on the contractor’s general liability policy. It’s important that the endorsement not be triggered by the performance of services by the insured (the contractor) for the additional insured since on the majority of projects the contractor is not performing work for the architect or engineer, but rather for the owner of the project.
Most contractors carry a “blanket additional insured” endorsement that provides additional insured status to any client for whom they perform work. However, such coverage is not triggered for an entity for whom the insured contractor is not performing any work. Therefore, the contractor should obtain an endorsement that provides specific protection, such as Insurance Services Office (ISO) CG 2032, “Additional Insured—Engineers, Architects or Surveyors Not Engaged by the Named Insured.” A contract requiring the contractor to provide additional insured status to the architect or engineer must also be in place to trigger the additional insured coverage on this ISO form.
Typically, the additional insured endorsement will limit the additional insured’s coverage to liability for bodily injury or property damage arising from the named insured’s operations in connection with the project. It does not require the contractor’s insurer to provide coverage for claims arising solely from the acts or omissions of the design professional. Since CGL policies contain professional liability exclusions, the policy will not respond to claims caused by an architect’s or engineer’s professional services.
Obtaining the correct endorsement is complicated. Therefore, it’s imperative that the endorsement be reviewed by a knowledgeable insurance consultant.