I thought the AI piece was very succinctly written. However, I have a question regarding the CG 20 33 section of it. What if in your example the general contractor’s subcontract incorporates by reference the terms and conditions of the general/owner contract into its body and goes on to state that the subcontractor is similarly bound by those terms and conditions? Could the owner then achieve AI status under a CG 20 33 endorsement?
James, Good question. Sorry about the delay. I had not checked this site and did not realize there was a question. If I were drafting or supervising the agreements, I would not depend on the CG 20 33 providing AI status to an owner on a subcontractor’s policy when there is no written contract between the owner and subcontractor. This is true even if the contact between general contractor and subcontractor incorporates the contract between owner and general contractor by reference. Is there a written contract between owner and subcontractor when subcontractor signs a contract with the general contractor that incorporates a contract between the owner and general contractor by reference? Is it at least enough to satisfy CG 20 33 written contract requirement? The larger the claim, the greater the scrutiny. To avoid the coverage scrutiny, why wouldn’t the subcontractor just name the owner using CG 20 38 or CG 20 10 (which was probably requested)? Why did ISO make CG 20 38 if CG 20 33 plus “included by reference” would be sufficient? I’d rather avoid the situation and hear that there are no coverage concerns because the owner was named as an AI on the subcontractor’s policy using CG 20 10 or CG 20 38. Let’s add CG 20 37 for completed operations while we’re at it too. http://www.DwightKealy.com
Thank you for the information. I find while working with agents many of them are new to writing the commercial lines of business and this article is very helpful when trying to provide information. I love the comparison at the end of the article.
Barb
You are on right track keep doing such great job. I always love to read your post at weekend. I always checkout your site for something new post is their or not. You are educating me thanks a lot again.
Nowadays most carriers add “When Required Per Written Contract” on CG2010, so does not it void the part where No Written Contract is Required? ANd second question, is not CG2038 a better alternative to CG2010 in this case since it also provides coverage for Upstream parties?
Read the article at the link I posted above. The most reliable endorsement is the CG 20 26 which has neither a contractual nor performance privity requirement.
Hi Dwight,
So funny I was educating myself on all the different endorsement. After reading it saw that it was you that posted this article. Thank you so much. We miss your training here at the office. Take care. :)
Your article has just been sent to me. Question — does the CG2038 really cover the owner as it reads under A. 2. Any other person….. Such person or organization is an additional insured only …. in the performance of your ongoing operations for the additional insured’.
The CG2010 and CG2037 use the same language ‘in the performance of your ongoing ops for the additional insured.
Also property managers, owner’s lenders etc may also be required to be additional insureds and we have used CG2026 for ongoing ops as it does not require a contract
it has been my contention that the cg2037 includes ongoing ops as well as prod/ops. It says the coverage is for “your work” (which I read as both ongoing and completed) as long as the scope of the work is shown as “included in the products-completed operations hazard”. That, in my mind, doesn’t restrict it to ONLY claims arising out of the products but, claims from your work (ongoing AND prod/ops).
I thought the AI piece was very succinctly written. However, I have a question regarding the CG 20 33 section of it. What if in your example the general contractor’s subcontract incorporates by reference the terms and conditions of the general/owner contract into its body and goes on to state that the subcontractor is similarly bound by those terms and conditions? Could the owner then achieve AI status under a CG 20 33 endorsement?
James, Good question. Sorry about the delay. I had not checked this site and did not realize there was a question. If I were drafting or supervising the agreements, I would not depend on the CG 20 33 providing AI status to an owner on a subcontractor’s policy when there is no written contract between the owner and subcontractor. This is true even if the contact between general contractor and subcontractor incorporates the contract between owner and general contractor by reference. Is there a written contract between owner and subcontractor when subcontractor signs a contract with the general contractor that incorporates a contract between the owner and general contractor by reference? Is it at least enough to satisfy CG 20 33 written contract requirement? The larger the claim, the greater the scrutiny. To avoid the coverage scrutiny, why wouldn’t the subcontractor just name the owner using CG 20 38 or CG 20 10 (which was probably requested)? Why did ISO make CG 20 38 if CG 20 33 plus “included by reference” would be sufficient? I’d rather avoid the situation and hear that there are no coverage concerns because the owner was named as an AI on the subcontractor’s policy using CG 20 10 or CG 20 38. Let’s add CG 20 37 for completed operations while we’re at it too. http://www.DwightKealy.com
For more information, check out this article:
http://www.independentagent.com/Education/VU/Insurance/Commercial-Lines/CGL/Additional-Insureds/2013AIChanges.aspx
Thank you for the information. I find while working with agents many of them are new to writing the commercial lines of business and this article is very helpful when trying to provide information. I love the comparison at the end of the article.
Barb
You are on right track keep doing such great job. I always love to read your post at weekend. I always checkout your site for something new post is their or not. You are educating me thanks a lot again.
Nowadays most carriers add “When Required Per Written Contract” on CG2010, so does not it void the part where No Written Contract is Required? ANd second question, is not CG2038 a better alternative to CG2010 in this case since it also provides coverage for Upstream parties?
Read the article at the link I posted above. The most reliable endorsement is the CG 20 26 which has neither a contractual nor performance privity requirement.
Is this specific to New York State or is this general across the board for work in all states?
Hi Dwight,
So funny I was educating myself on all the different endorsement. After reading it saw that it was you that posted this article. Thank you so much. We miss your training here at the office. Take care. :)
Where can a person obtain copies of standard ISO forms for educational purposes only.
Your article has just been sent to me. Question — does the CG2038 really cover the owner as it reads under A. 2. Any other person….. Such person or organization is an additional insured only …. in the performance of your ongoing operations for the additional insured’.
The CG2010 and CG2037 use the same language ‘in the performance of your ongoing ops for the additional insured.
Also property managers, owner’s lenders etc may also be required to be additional insureds and we have used CG2026 for ongoing ops as it does not require a contract
Would appreciate your comments.
Great info, thanks. Since the CG 2026 is ongoing ops, would the CG 2037 pair with the 26 in order to provide completed ops?
My objective is to best cover the AI interests of the commercial landlord and property manager.
Thanks!
This article is excellent. It helped me to make an informed decision about which coverage endorsement options to choose for a contract job.
Thank you!
Mr. Kealy,
Enjoyed your article, very insightful and easy to understand.
Mike
it has been my contention that the cg2037 includes ongoing ops as well as prod/ops. It says the coverage is for “your work” (which I read as both ongoing and completed) as long as the scope of the work is shown as “included in the products-completed operations hazard”. That, in my mind, doesn’t restrict it to ONLY claims arising out of the products but, claims from your work (ongoing AND prod/ops).