For years, those receiving Certificates of Insurance reflecting coverage held by New York contractors could never be certain of the breadth of coverage afforded by the policies. Many of the insurers covering contractors working in New York place restrictive endorsements on their policies, and these endorsements are not normally shown on a Certificate of Insurance.
Although restrictive endorsements are nothing new in the world of contractors’ insurance, they are a particular problem in New York. The safe-place-to-work sections of New York’s Labor Law create strict liability for owners and general contractors for workers injured at job sites. For this reason, most of the insurance written to cover New York contractors is written outside the standard insurance marketplace; flexibility of forms in these alternate markets often results in severely limited coverage.
Acord recently issued an addendum (Acord 855 NY) to its Certificate of Liability Insurance (Acord 25) to be used, upon request, with Certificates of Insurance issued for work in New York. The purpose of the new form is to provide more and better information about the policies included on the Acord 25.
The addendum requires that the insurance agent or broker completing the form answer questions such as:
• Is coverage written through an authorized insurer?
• Is the General Liability Coverage Form an ISO (industry standard) form?
• Are specific operations excluded or restricted (e.g. building height, residential work, work in the 5 boroughs of New York City)?
• What Additional Insured endorsement form is on the policy?
• Does coverage for the Additional Insured on the General and Excess Liability Policies apply on a primary and non-contributory basis?
• Will notice of cancellation be given to the Additional Insured?
• Have modifications to the contractual liability coverage been made?
• Has the “insured contract” exception to the Employers’ Liability exclusion been modified?
• Is there coverage for injuries to the Named Insured’s employees or subcontractors?
• Have exclusions for earth movement, explosion, collapse and underground work been added?
• Has a cross liability exclusion been added?
• Has the subcontractor exception to the Damage to Your Work exclusion been removed?
Having the answers to these important questions ensures that those relying upon Certificates of Insurance can do so with reasonable confidence. They will know more than policy numbers and coverage limits. They will now receive the information they need to decide whether the coverage carried by their subcontractors is adequate.