BROADCASTS.com

b'

"Additional Insured" Requirements of Construction Contracts and Policies    

https://zalma.com/blog

Although the \\u201cadditional insured\\u201d requirement provides additional  security to the owner and architect, it can add to the cost of  insurance. Regardless, the requirement is often included in contract  documents and, if not carefully drafted, can result in multiple disputes  as to which insurer is required to defend which insured. Construction  contract language should be designed to avoid such disputes. An owner and a contractor should make every effort to obtain language in  their contract forms that will avoid ambiguous \\u201cadditional insured\\u201d  endorsements. The form language in the example above includes a  requirement that the contractor provide the owner with a certificate, a  copy of the actual endorsement making the owner an additional insured,  and a copy of the entire policy. An owner who receives an endorsement  should read it carefully and if it is not clear, then the owner should  demand that it be clarified.  The requirements are usually verified by the contractor providing to the  owner, architect, and others a \\u201ccertificate of insurance\\u201d that is a  statement by an insurance agent or broker that insurance exists at the  time the certificate is signed in the amounts stated in the certificate  by the insurers represented. A certificate is not insurance but only  evidence of insurance at a specific time. Certificates often promise to  advise the certificate holder if the policy is cancelled or otherwise  goes out of force.  Parties to such contracts must carefully review their insurance  contracts and be certain that their agents and brokers obtain policies  that provide for such waivers of subrogation. Failure to do so can void  the insurance contract as was held by the California Court of Appeals in  Liberty Mutual Insurance Co. v. Altfillisch Construction Co., 70  Cal.App.3d 789, 139 Cal.Rptr. 91 (Cal.App.Dist.4 1977) where the court  held that the waiver was \\u201cclearly a breach of the insured\\u2019s implied  covenant of good faith and fair dealing.\\u201d  \\xa9 2021 \\u2013 Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost  equally for insurers and policyholders. He also serves as an arbitrator  or mediator for insurance related disputes. He practiced law in  California for more than 44 years as an insurance coverage and claims  handling lawyer and more than 52 years in the insurance business. He is  available at http://www.zalma.com and zalma@zalma.com.  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library \\u2013 https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4