additional insured
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You’ve hired an HVAC subcontractor to work on your project and have asked him to provide a certificate of insurance naming you, the general contractor, as Additional Insured on his Commercial General Liability (CGL) Policy.   He is allowed to begin work only after you receive and review the certificate and the Additional Insured endorsement.  You now rest assured that, if there is a claim resulting from the sub’s work, you are fully protected.  Unfortunately, there is one more important thing you still need to do.

Most CGL policies include coverage for the Named Insured for ongoing and completed operations.  Ongoing operations coverage applies while, as the name suggests, the operations are ongoing.  Completed operations coverage applies when completed work results in an occurrence of bodily injury or property damage during the policy period. While the Named Insured may be covered for both, most Additional Insured endorsements include only ongoing operations coverage for Additional Insured. 

Let’s go back to the scenario to see why this difference is important.

  • If an employee of the HVAC subcontractor is injured on the job site and files a claim against you, the general contractor, you can look to the subcontractor’s CGL policy for coverage if you’ve been added as an Additional Insured. This is an ongoing operations claim.
  • One year after the project ends, a problem with the HVAC system caused water damage to the building. It is determined that the system was improperly installed, and the building owner files a claim against you, the general contractor.  You have the certificate of insurance and Additional Insured endorsement for the period of time when the work was performed.  The problem is that the policy shown on the certificate and the Additional Insured endorsement won’t apply to this claim.

To make sure that you have coverage in this second claim, it is important to continue to require coverage for the both the subcontractor and you as Additional Insured after the work is completed.  This requirement should be included as part of the contract you have with your subcontractor.  The best way to be sure coverage applies is to continue asking for insurance certificates after the project ends and to review the Additional Insured endorsement to be sure it covers completed operations.

Not all claims happen during the course of the project.   Making sure that Additional Insured coverage applies both during and after the project is key to making sure you’re your subcontractor’s CGL policy will protect you should something go wrong.

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