Determining the Scope of “Additional Insured” Coverage: Recent ISO CGL Insurance Form Revisions Merit Close Attention By Contracting Parties


It is common among parties to sophisticated construction projects, service agreements, leases, and many other types of projects and transactions, to assess the risks associated with their contractual activities and allocate those risks through a combination of contractual indemnification provisions and insurance requirements. In the construction setting, for example, project owners, general contractors and developers (so-called “upstream” parties) typically require their subcontractors and sub-subcontractors (“downstream” parties) to indemnify them for claims arising from the contract work. In addition to the contractual indemnification provisions, upstream parties frequently require that they be provided with “additional insured” status on the downstream indemnitor’s/named insured’s general liability insurance policy. This provides a number of benefits to the upstream indemnitee. It effectively gives the additional insured/indemnitee direct coverage rights under the indemnitor’s insurance policy, preserves the indemnitee’s own liability coverage and may protect the indemnitee in the event the contractual indemnification provision in the parties’ contract is determined to be void and unenforceable.

Additional insured status may be achieved in several ways. Commonly, it is established through an omnibus definition of “Insured,” which may include, for example, the named insured and entities for whom the named insured is obligated by “insured contract” to provide insurance. Alternatively, additional insured status is often achieved through the purchase of “blanket” or “scheduled” additional insured endorsements. The additional insured status under a liability policy is an important bargained-for asset in many types of transactions.

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