As mentioned in a prior post, What is an Additional Insured Endorsement, in some cases the “typical” Additional Insured Endorsement will not meet the requirements of the requesting party.
The Typical Additional Insured (AI) Endorsement:
The “typical” Additional Insured endorsement only affords coverage to the Additional Insured for claims that occur from Ongoing Operations.
This may be plenty for a Building Owner that leases space to a business that is a retail operation, because any claims that occur, will likely be the result of the store’s operations.
However, an Additional Insured endorsement that only includes Ongoing Operations will likely not be sufficient for a General Contractor (GC) that wants to hire Subcontractors.
When the Typical AI Endorsement may not be enough:
Let’s say the GC is hired by a Building Owner to renovate a building. Part of the renovation includes extensive electrical updates. The GC subs the Electrical Work out to an Electrical Contractor. The project is completed on time, seemingly successfully and all parties are happy.
A few months later, a fire starts and there is extensive damage to the building. The cause of the fire is determined to be faulty wiring work with a total estimated cost to renovate of $225,000.
The project is complete, so the fire is not the result of Ongoing Operations of the Electrical Subcontractor, it resulted from their completed faulty work.
The Building Owner, as expected, looks to the General Contractor to cover the $225,000 in damages to their building.
How to make certain your Business is Protected:
Fortunately for the GC, they require (in a written contract) any Subs that they hire to name them as an Additional Insured (AI) for not only Ongoing Operations, but also Completed Operations.
Had they not specified that the Additional Insured endorsement must include Completed Operations, they would not be protected (defense and settlement) by the Electrical Subcontractor's General Liability Policy.
Call (636-519-0059) or email today if you need assistance with your Missouri Contracting Insurance.