2 Who We Are Ranked among the largest specialty insurance brokers in the United States. 400 insurance professionals in 11 offices. Colemont has been independent.

2

Who We Are• Ranked among the largest

specialty insurance brokers in the United States.

• 400 insurance professionals in 11 offices.

• Colemont has been independent since it was founded in 1992.

• Colemont launched an international expansion in 2005 and now nearly 300 employees overseas with offices in 15 countries.

Premium Volume Growth

Why We’re Different

• Totally Independent: Colemont was founded on the premise that the insurance marketplace would always need – even demand – a truly independent wholesale specialty broker. Independent in that we were not affiliated with a U.S. retail operation.

• Passion for Service: We understand that quick reaction times and a work product that is comprehensively responsive to your client’s needs make you look good; and when you look good, we look good.

• Product and Coverage Expertise: Colemont’s brokers are routinely asked to find just the right answer to difficult or even one-of-a-kind coverage needs. Generally, each of our brokers specializes in a particular product area – e.g. property, professional liability, etc. – and are well-versed in the intricacies and nuances different coverage parts provide. By virtue of being a national firm, brokers are encouraged to reach out to other Colemont brokers to question and collaborate. Also, many of our brokers have prior retail and/or underwriting experience, which allows them to better communicate with their clients.

• Unmatched Market Access: Colemont’s brokers have access to more than 400 markets – domestically and internationally. More choices mean more options for your insured.

• Culture: Integrity, urgency, creativity, service, teamwork, and intensity.

• Proprietary Market Intelligence Systems: Allows us to quickly identify the best markets meeting the needs of your customers.

Your Colemont Brokers

Gary Grindle, CPCU, CRIS, ASLI [email protected]

Products:  Casualty . Property & Inland/Ocean MarineSpecialties: Construction, Manufacturing & International

Philip Chester [email protected]

Products:  Financial ServicesSpecialties: Medical Malpractice

Mike O'Brien [email protected]

Products:  Financial Services

CALL: (877) 644-3284

Jeffrey J. Vita is a founding partner of Saxe Doernberger & Vita, P.C., a Connecticut-based firm dedicated to the representation of policyholders in insurance coverage disputes. In the last several years, Mr. Vita has focused his practice on the representation of business policyholders in insurance coverage matters implicating coverage under comprehensive general liability, directors & officers, professional liability, commercial property, and health insurance related policies.

Mr. Vita has handled coverage cases related to construction, professional malpractice, healthcare, business interruption, employment, disability, and environmental claims. He has successfully tried numerous court trials and commercial arbitrations. Currently, Mr. Vita is representing healthcare providers in connection with disputes arising out of the provider/payer relationship against several large HMOs. He also has authored numerous articles on insurance coverage issues and has lectured frequently on a variety of insurance coverage topics including additional insured issues, bad faith claims, allocation of coverage, and the duty to defend.

Tobias J. Cushing represents clients in insurance coverage disputes involving commercial general liability, commercial property , directors & officers and professional liability insurance. In particular, he has handled cases involving environmental liability, construction defects and healthcare provider reimbursement disputes. Mr. Cushing has also consulted with a number of clients to improve their existing insurance programs and has represented them in renewal negotiations with insurance carriers. Since joining SDV he has argued various motions, tried cases and represented clients in a number of settlement negotiations and commercial transactions.

During law school he worked at the Connecticut Attorney General's Office and was an extern in the Federal District Court of Connecticut and the New Haven Superior Court. Mr. Cushing's LLM in Insurance Law from the University of Connecticut School of Law has provided him with a broad based knowledge in: Insurance Regulation, Insurance Finance, Property Insurance, Liability Insurance, Insurance Litigation, Life and Health Insurance, and Reinsurance.

[email protected]

[email protected]

6

Jeffrey J. Vita and Edwin L. Doernberger Saxe, Doernberger & Vita, P.C.

Coverage for Contractual Risk Transfer

and Additional Insured Issues

9/10/08Harrisburg, PA

Jeffrey J. Vita

Tobias J. Cushing

OutlineOutline

Introduction Contractual Indemnity Additional Insured Coverage Co-Insurance Issues re: AI Coverage Certificates of Insurance Waiver of Subrogation Case Studies Discussion

Risk Transfer

Additional

Insured

Coverage

3rd Party Liability Insurance

CGL

Professional

Pollution

1st Party Insurance

Subcontractor Indemnity

Subcontractor

Default Insurance

Builders Risk

Contractual Rights

Risk Transfer

Commercial

Property

Effect of Indemnity ProvisionsEffect of Indemnity Provisions

May shift payment of defense to sub/indemnitor

May shift indemnification to sub/indemnitor

Risk Allocation through ContractRisk Allocation through Contract

GC/CM contract, subcontract, side agreement Specific paragraphs for indemnity Hidden provisions throughout contract

Contract Language

Policy Language

Insured Contract

Contract LanguageContract Language

“…the Subcontractor agrees to indemnify and save [GC] harmless of all loss, cost, expense, liability, damage or injury, including legal fees and disbursements …”

Risk Allocation

Policy Language

Insured Contract

Policy LanguagePolicy Language

This exclusion does not apply to liability for damages:(1) Assumed in a contract or agreement that is an “insured contract,” provided the “bodily injury” or “property damage” occurs subsequent to the execution of the contract or agreement; or(2) That the insured would have in the absence of the contract or agreement Risk Allocation

Contract Language

Insured Contract

Insured ContractInsured Contract

That part of any other contract or agreement…under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person

Risk Allocation

Contract Language

Policy Language

Indemnity: What is Covered?Indemnity: What is Covered?

Liability

Not Covered Covered

Indemnity

Contractual Indemnity v. AI CoverageContractual Indemnity v. AI Coverage

AI coverage and indemnity operate independently

Indemnity covered as contractual liability AI coverage determined by policy and AI

endorsement AI coverage not limited by states’ anti-

indemnity laws

Ten MinuteTen Minute BreakBreak

Benefits of AI StatusBenefits of AI Status Supplement to contractual indemnity

Protects GC from own negligence and vicarious liability

Prohibits subrogation

Avoids impact to GC’s loss history

AI IssuesAI Issues

Who is an “Insured”? Blanket Endorsement Specifically Named

Notice to Insurer

Evolution of the AI EndorsementEvolution of the AI Endorsement

2001 20041985 1993

CG 20 10 11 85 “Arising out of”

CG 20 10 10 93 Limits coverage

to “ongoing operations”

CG 20 10 10 01 Excludes coverage

for completed operations

CG 20 10 07 04 Replaces

“arising out of” with “caused in

whole or in part.” Excludes

completed operations

CG 20 37 10 01

Reinstates completed operations coverage

CG 20 10 11 85CG 20 10 11 85

but only with respect to liability arising out of “your work” for that insured by or for you

CG 20 10 10 93CG 20 10 10 93

but only with respect to liability arising out of your ongoing operations performed for that insured.

CG 20 10 10 01CG 20 10 10 01This insurance does not apply to “bodily injury” or “property damage” occurring after:

(1) All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the site of the covered operations has been completed;

CG 20 37 10 01CG 20 37 10 01

but only with respect to liability arising out of “your work” at the location designated and described in the schedule of this endorsement performed for that insured and included in the “products-completed operations hazard”.

Section II – Who Is an Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule, but only with respect to liability for “bodily injury”, “property damage”… caused, in whole or in part, by:

1. Your acts or omissions; or

2. The acts or omissions of those acting on your behalf;

In the performance of your ongoing operations for the additional insured(s) at the location(s) at

This insurance does not apply to “bodily injury” or “property damage” occurring after:

1. All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the location of the covered operations has been completed;

CG 20 10 07 04CG 20 10 07 04

As AI, GC is entitled to same protection as named insured

Make sure contract and policy are clear that sub’s insurance (primary and excess) will act as primary with GC’s insurance as excess

AI Insurance - Primary v. ExcessAI Insurance - Primary v. Excess

Ten MinuteTen Minute BreakBreak

Co-Insurance IssuesCo-Insurance Issues

“Other Insurance” Horizontal v. Vertical exhaustion

Horizontal is more common Vertical exhaustion a/k/a targeted tender

Owner

(DASNY)

Const. Mgr

(BOVIS)

Illinois $1M Primary Policy

Gen. Ctr. (STONEWALL)

Liberty $1M Primary Policy

Westchester $10M Umbrella

Steel Ctr

(SMI-OWEN)

Elevator Sub. (AJ MCNULTY)

Great AmericanConcrete Sub.

(J&A)

QBE $1M Primary

United $5M Umbrella

DECEDENT

Horizontal v. Vertical Exhaustion-ExampleHorizontal v. Vertical Exhaustion-Example

Horizontal v. Vertical Exhaustion-ExampleHorizontal v. Vertical Exhaustion-ExampleTrial Court Apportionment of AI CoverageTrial Court Apportionment of AI Coverage for Bovisfor Bovis

QBE$1,000,000

J&A Primary

UNITED$5,000,000

J&A Umbrella

LIBERTY$1,000,000

Stonewall Primary

WESTCHESTER$10,000,000

Stonewall Umbrella

ILLINOIS$1,000,000

BOVIS PRIMARY

Horizontal v. Vertical Exhaustion-ExampleHorizontal v. Vertical Exhaustion-ExampleAppellate Court Apportionment of AI Coverage for BovisAppellate Court Apportionment of AI Coverage for Bovis

Sharing pro rata

QBE$1,000,000

J&A Primary

LIBERTY$1,000,000

Stonewall Primary

ILLINOIS$1,000,000

BOVIS PRIMARY

WESTCHESTER$10,000,000

Stonewall Umbrella

UNITED $5,000,000

J&A Umbrella

Ongoing OperationsOngoing Operations

“Ongoing operations” language in endorsement does not limit AI coverage to losses that occurred while contractor was onsite or while work was in progress

See Valley Ins. Co. v. Wellington Cheswick, 2006 WL 3030282 (W.D. Wash.) (in property damage claim for alleged defective construction of condominium, while property damage may not have occurred during ongoing operations, the alleged liability did)

Completed OperationsCompleted Operations

Completed Operations coverage addresses continuing liability for an additional insured from the named insured’s work after that work is completed

Certificates of InsuranceCertificates of Insurance

Do not rely on certificate of insurance as evidence that you are an AI

Obtain all policies and endorsements at start of each project from the subcontractors including all renewals At a minimum obtain declaration page, AI

endorsement and certificate of insurance

SubrogationSubrogation

Subrogation allows a party who has paid a loss or debt on the part of another to succeed to the rights of that other party to pursue recovery from a third party who was responsible for causing the loss

The right to subrogation can be waived prior to loss

Waiver of SubrogationWaiver of Subrogation

Allocate the risk of property damage and do not permit reallocation through subrogation Contractually waive subrogation

and/or

• Include party and all of its subcontractors as insureds since insurers can not subrogate against their own insureds

Texas High SchoolTexas High School

Florida CondominiumFlorida Condominium

Connecticut HospitalConnecticut Hospital

New York SynagogueNew York Synagogue