Additional Insured Endorsements-Is the Coverage There?

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Something that insureds should be aware of, contractors in particular since this practice is widespread in their industry, is the fact that Additional Insured endorsements can often reduce the actual coverage available to them, the actual Named Insured. In a recent article in The Insurance Journal, Chris Boggs, the author, sited the case of a large construction company that required one of it's subcontractor's to add them as an additional insured to the sub's general liability policy. Subsequently, the subcontractor hired another subcontractor to complete some of it's responsibilities. This is where it gets hairy. The subcontractor hired by the original subcontractor had an employee injured on the site by another contractor, also hired directly the the large construction company. The employee's company filed suit against all parties, the main contractor and also the subcontractors involved in the event, either directly or indirectly. The crux of this case is that the subcontractor that hired the injured subcontractor had to have their general liability policy respond, reimburse, the construction company that hired them, for insurance costs related to their insurance company's settlement of the claim to the injured party. For more detail on this case please go to the link provided under the title. The main point of all this is that all too often, in the course of business, we take for granted what is thought of as a standard request, in this case asking to be added as additional insured to a policy. It is important that you discuss this with your agent to ensure you have your bases covered and not take your coverage for granted.