For contracting insurance specialist agents

[rcenters]

Branching off from something discussed in another topic, I was wondering what procedures some of you all use relevant to your construction accounts and specific to issues on certificate related issues:

Do you require your insureds to fill out your own design of certificate request forms? If so, what special information do you collect, including whether or not additional insured status is required by a written contract?

Secondly, on your proposals when you are bringing the account into your office in the first place, to what extent do you provide details on whether their additional insured endorsement is blanket or not, and also, whether or not the endorsement applies to Completed Operations?

Lastly, how do you actually word language on your certificates when you have to do additional insured? Do you attempt to mirror policy/endorsement language as closely as possible and limit additional insured status to "work(or ongoing operations, if that's what the policy says) performed by the named insured only?

I have handled Construction accounts for several years and am very familiar with the coverages themselves, but I am at a different agency now that isn't a construction specialist and so I'm looking to compare what we do currently to how others are.

[Rob]

On my proposals, I indicate whether the additional insured is blanket or cost per endorsement. If a CG 2010 11/85 type is not available, I do put a statement to that effect.

On the certificate, I reference the endorsement i.e. "XYZ is named as additional insured per company endorsement XXX" or whatever the endorsement number/type is. I don't want to try to mirror policy language on a certificate, I just personally don't think that is a good idea. I include the second page which has the disclaimer stating that if there is an additional insured, the policy must be endorsed"

[LadyBroker]

Your proposal should ALWAYS state up front if the policy offers Completed Operations, or is only Ongoing Operations, for AI status. It's too late when it's bound to tell them they don't have the right coverage.

If the AI is blanketed, most carriers don't even want to see the certs, they assume you are monitoring the certs, and are issuing them appropriately. For instance, many now state in the language of the policy that in order for the AI to apply, there must be a written contract. As the retailer, you should be getting a copy of every one of these contracts.

Your best bet is to attach a copy of the carrier's additional insured form, and not try to paraphrase anything. Remember, the cert does not bind the carrier to anything more than what the policy actually covers. If, as the retailer, you put something on the cert that is not on the policy, your E & O will come into play, and that's not ever a good thing.

[rcenters]

I certainly agree that it would be prudent to get copies of the contracts. Do you get any resistance to providing them, do you refuse to issue certificates until they provide? Certainly it creates a lot of work for the client to find every one of their open contracts. I was thinking of having them sign a disclaimer that states that we can't ensure compliance with contracts we have not been provided with.

But I'm assuming though that if you require copies of the contracts you have some sort of disclaimer confirming you are not reviewing them for the purpose of providing legal advice?

[LadyBroker]

I don't ask for the contracts to review them for anything other than to confirm that there is a contract. Most AI forms now state coverage is conditioned on a written contract between the prime and the sub. If you, as the retailer, are issuing AI endorsements and not checking this, you could have a problem the one time they don't have a written contract...cause Murphy's law dictates that's when the loss occurs.

Certainly as the retailer you are able to review the contract and be certain the Sub is naming your client as an Additional Insured, they are holding them harmless and waiving subro. A standard AIA contract contains all this wording. You might also want to take a peek at the job itself, and be certain the job is not something excluded...like your contractor just decided to build a custom home in California...not all carriers are good with that.

[rcenters]

While I agree that we should tell the client if the additional insured endorsement does or doesn't cover completed operations....except for, say, CG 2037, no endorsement actually comes out and says that it covers completed ops. With that said, the reason that CG 2010 11/85 and similar endorsements do cover it is because courts have held that it does, not that it was actually ISO's intent. If I'm looking at a manuscripted additional insured enhancement endorsement for a carrier that refers to "your work" and has no exclusion for completed ops and doesn't define it out of the scope of coverage, I feel that I'm justified, based on court decision precedent, to say that it DOES cover completed ops.

BUT - in doing this, aren't I making an assertion that only a licensed attorney should be making? Or is this something that does fall within an insurance professional's scope?

Also, LadyBroker, do you experience any resistance from clients to providing those contracts and if so, what do you do about it?

[LadyBroker]

I'll answer your 2 questions in reverse order.

1. I don't get resistance over securing the contract because I am the wholesaler, not the retailer. If, as a retailer, you are running into resistance, it may be because they are doing jobs not covered, or they are not using contracts. I eliminate this problem at time of accepting a retailer's submission by requiring a specimen copy of their sub-contractors agreement, assuming they use subs.

2. With regards to your question on a Manuscripted endorsement, you should review the definition of 'your work' that is in the policy. For a policy with the CG2010 11/85 endorsement, 'your work' is your ongoing and completed operations. For a policy with the CG2010 10/93 endorsement, 'your work' is 'ongoing operations'. Simple as that. As well, BOTH ISO edition 11/85 and 10/93 also state that the AI is 'any person or organization to whom or to which you are obligated BY VIRTUE OF A WRITTEN CONTRACT or by the issuance or existence of a written permit, to provide insurance. They both go on to also restrict Primary Wording to only instances where a WRITTEN CONTRACT is in place. I know of no instance where a court has decided, on a policy where the 10/93 or later AI form is in place, that the Completed ops were included anyway....I would be careful assuming this to be true. The reason that everyone wants the 11/85 edition is because it covers Completed Ops. It states it clearly, and is certainly the carrier's intent. Later editions of the 2010 do not have this wording, so it is not in the contract.

I agree, it is not your job to give legal advice. Your job is to know your coverages. If your client has an endorsement requiring a written contract for coverage to trigger, and he does NOT have a written contract, the claim will be denied. I have seen it happen, and have seen it happen to the big alphabet houses, and had it happen on one of mine, so I know of which I speak.