You’ve just been awarded a new job and receive the contract to be signed. The contract has numerous insurance requirements, and, at first glance, you think you have what you need. The contract requires that you carry a $1,000,000 Commercial General Liability (CGL) Policy and that you add the general contractor as an additional insured endorsement using the CG 20 10 11 85 endorsement. You know that you have a $1,000,000 policy and that you’ve added others to your policy as an additional insured endorsement as well, so you sign the contract, thinking all is fine.
It’s only after the general contractor receives your Certificate of Insurance and additional insured endorsement that you realize there is a problem. Your insurer uses the April 2013 edition of the CG 20 10 endorsement, which is the most current version. The contract you signed requires the November 1985 version which is dramatically different. Until you produce the required endorsement, the general contractor will not allow you onto the site. Your insurer, like many others, though, no longer offers the older version of this form.
This problem occurs daily at job sites across the country. The last four digits of an endorsement number indicate its edition date; CG 20 10 11 85, for example, is the version that was released in November, 1985. To illustrate the drastic differences between the editions, this is some of the history of one endorsement:
Additional Insured Endorsement – Understanding the Importance of Edition Dates
CG 20 10 11 85 – This edition provides coverage for ongoing and completed operations. It also provides coverage for the additional insured, even if the named insured has done nothing wrong.
CG 20 10 10 01 – This edition provides coverage for ongoing, but not completed operations. Like the one before, it provides coverage for the additional insured, even if the named insured has done nothing wrong.
CG 20 10 07 04 – This edition continues to omit completed operations coverage. It also requires that the loss occur, at least in part, because of the acts or omissions of the named insured. One result of this language is that there is no coverage for the sole negligence of the additional insured.
CG 20 10 04 13 – This endorsement starts with the same level of coverage as the one before it, but further limits coverage to what was agreed to in the contract between the parties.
It is important to find out what endorsements your insurance company will add before you sign a contract agreeing to add an additional insured endorsement to your CGL policy. If your carrier will not use the required endorsement, the terms of the contract can sometimes be re-negotiated. In some cases, contractors have been faced with the decision of having to change insurers or give up a contract.
The subject of an additional insured endorsement is complex, and edition dates are only part of the story. It is important to discuss the requirements of any contract with an insurance professional to make sure you are in compliance. If you have any further questions please feel free to give us a call at 1-800-649-9094. We look forward to hearing from you!