Section 4.29 Commercial General Liability Insurance

• Library: Construction Law 2016 Supp

C. (§4.29) Commercial General Liability Insurance

Unlike the one endorsement for a business automobile policy, the standard additional insured endorsements under a CGL policy provide a potpourri of options. The existing ISO CGL forms book lists over 30 current additional insured endorsements to choose from, seven of which are relevant for construction work:

1. Additional Insured: Engineers, Architects, or Surveyors—CG 20 07 07 98

2. Additional Insured: Owners, Lessees, or Contractors—Scheduled Person or Organization (for Use When Contractual Liability Coverage Is Not Provided to You under this Policy)—CG 20 09 03 97

3. Additional Insured: Owners, Lessees, or Contractors—Scheduled Person or Organization—CG 20 10 10 01

4. Additional Insured: Designated Person or Organization—CG 20 26 11 85

5. Additional Insured: Engineers, Architects, or Surveyors Not Engaged by the Named Insured—CG 20 32 07 98

6. Additional Insured: Owners, Lessees, or Contractors—Automatic Status When Required in Construction Agreement With You—CG 20 33 10 01

7. Additional Insured: Owners, Lessees, or Contractors—Completed Operations—CG 20 37 10 01

These endorsements deal with the usual contracting parties for construction work: architects; engineers; owners; general contractors; and subcontractors. In some cases, depending on the edition of the above endorsement that is used, the additional insured can obtain greater risk transfer than is achievable under a limited indemnity. Each of these construction players is discussed below when exploring their applicable standard ISO additional insured endorsements and the guidance on their respective use that is contained in the ISO Commercial Lines Manual (CLM).

Architects and engineers often seek protection in their agreements with the owner or developer by requesting that the project’s general contractor name them as additional insureds under its CGL policy and, in some cases, asking the same from the owner or developer. In making this request, architects and engineers are seeking risk transfer of third-party-over actions arising out of their negligence emanating from their nonprofessional acts or omissions—allegations that they had a duty to monitor the contractor’s safety programs or provide a safe job site. In some cases, an architect or engineer may obtain additional insured status from the general contactor simply because it authors the project’s set of specifications, which may include contract terms and conditions, including the demand for additional insured status for the architect or engineer. Hence, having knowledge of these endorsements can be helpful to an architect or engineer who has as one of its scope of services the preparation of a project’s specifications.

According to the CLM, forms CG 20 07 and CG 20 32 are to be used for architects or engineers. CLM explains that CG 20 07 is to be selected when the insured has a contract with the architect or engineer, while CG 20 32 is to be employed in situations when the insured—usually the general contractor—is required by contract to name a noncontracting party, i.e., the architect or engineer, as an additional insured under its CGL policy. But having some historical knowledge of these forms may prove beneficial to the architect or engineer if either desires to have coverage beyond the general contractor’s ongoing operations provided under the current endorsements for these two forms—i.e., completed operations coverage. Therefore, it is necessary to discuss the pre-1993 CG 20 07 form (CG 20 07 01 87), the post-1993 CG 20 07 form (CG 20 07 07 98), and the CG 20 32 form (CG 20 32 07 98) that was introduced in 1996.

Before 1993, the only endorsement that was technically available to an insured and its underwriter, according to CLM, involved an insured that had a contract with the architect or engineer. Parties were left to their own devices in all other situations. Most likely, contractors or subcontractors simply used CG 20 07 01 87 or CG 20 10 11 85...