This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
CIn
The topic of additional insured status is a difficult one at best. Manymisconceptions result when adding contracting parties to one an-other’s insurance policies as additional insureds. There is also thetug-of-war between insurers and indemnitors that want to limit thescope of additional insured coverage under their policies and the in-demnitees who want to maximize coverage under the policies of theindemnitors. Added to this, the interaction of additional insured sta-tus with indemnity clauses, insurance requirements, and other con-tract provisions is unique and complex. This session will examine thereasons for requiring, methods of achieving, and problems associat-ed with additional insured status under various policies.
This file is set up for duplexed printing. Therefore, there are pages that are intentionally leftblank. If you print this file, we suggest that you set your printer to duplex.
2
Additional Insured Endorsements
#IRMI2016
#IRMI2016
WHY MUST THEY
TORTURE ME?How One Little Piece of Paper
Changed an Industry
2
3
#IRMI2016
E&O
The ultimate “additional insured” endorsement
3
#IRMI2016
What Is(n’t) A Certificate Of Insurance?
• Informational snapshot only•Cannot modify a policy• Is not a contract (or is it?)
4
4
#IRMI2016
Three Types Of Certificate Desires
• I have a dream•Here’s what I’ll settle for•Deal-breaker
5
#IRMI2016
Four Types Of Certificate Requests
Uninsurable“Any”• Acts, errors, omissions• Any and all liabilities• Claims, costs, expenses, liabilities, penalties, fines
“Primary and Non-contributory”• What does non-contributory mean?• Non-CGL policies
“Equivalent” or “comparable”
6
5
#IRMI2016
Four Types Of Certificate Requests
Illegal
Non-existent coverage• Withdrawn endorsements• Transfer of sole negligence
Certificate modifications• Striking through / amending language / disclaimers• ACORD copyright violation• Statute, regulation or DOI directive violation
7
#IRMI2016
Four Types Of Certificate Requests
Inappropriate
• Cancellation notice• No longer provided• “Endeavor to” was a pipe dream
• Non-ACORD Certificates• Usually require company approval• Improper request or copyright infringement
8
6
#IRMI2016
Four Types Of Certificate Requests
Inappropriate
• Comprehensive General Liability• Comprehensive Automobile Liability• Agent attestation (“in the opinion of the agent, the policy
contains the required insurance coverages/indemnifications required by the contract with the insured”)
9
#IRMI2016
Four Types Of Certificate Requests
Impractical
• Unavailable or expensive• Completed operations, EIFS, pollution, subsidence, mold, etc.• No time to search market before certificate is due
10
7
#IRMI2016
Weird Requests
• “Ongoing operations”• “XYZ Corporation and its officers, directors, partners,
members, and employees”• “coverage to continue for (5) (10) years”• “x”, “c” and “u” exclusions removed• Blanket contractual liability• Broad form property damage
11
#IRMI2016
Other Issues
• Certificate limit v. policy limit• Impaired aggregates• Deductibles and SIRs• Defense within limits• Known loss or damage• Umbrella and excess policies• Copyright issues• Carrier agreements
“Your authority extends to issuance of standard, unalteredCertificates of Insurance (ACORD 24 or 25)”
12
8
#IRMI2016
Use The Proper Form
• ACORD Certificates• 20 Certificate of Aviation Liability Insurance• 21 Certificate of Aircraft Insurance• 22 Intermodal Interchange Certificate of Insurance• 23 Vehicle or Equipment Certificate of Insurance• 24 Certificate of Property Insurance• 25 Certificate of Liability Insurance• 27 Evidence of Property Insurance• 28 Evidence of Commercial Property Insurance• 29 Evidence of Flood Insurance• 30 Certificate of Garage Insurance• 31 Certificate of Marine/Energy Insurance
13
#IRMI2016
What You Should (and Should Not) Do
• DO provide a disclaimer to the insured and certificateholder• DO NOT exceed your legal or contractual authority• DO work with the insured’s attorney or minimize contract review• DO NOT modify an ACORD certificate• DO proof-read all certificates and perform periodic audits• DO establish a procedure for handling certificates• DO always send the entire certificate (both pages)• DO be judicious with the “big white box” – the FIG indicates
you should put “any exclusion endorsement or special policycondition”
14
9
#IRMI2016
What You Should (and Should Not) Do
• DO send copies of certificates to all insurers/MGAs/wholesalers• DO use the correct form• DO NOT use proprietary or non-ACORD forms without company
approval• DO NOT certify coverages that don’t exist • DO NOT indicate limits on a certificate that satisfy the request
when actual policy limits are higher• DO NOT sign any certification or attestation without
management approval
15
10
#IRMI2016
Additional Insured
Changes
16
#IRMI2016
2013 Changes
• 24 revised forms• Many changes are due to state “anti-indemnity” statutes• Coverage for AI is “only to the extent provided by law”• Coverage for the AI cannot be more broad than that provided to the Named
Insured• New forms
• CG 20 01 – Primary and Non-Contributory – Other Insurance Endorsement• Requires AI to be an NI on other available insurance• Written contract must state that our insured’s policy be primary and not seek contribution from
other insurance of the AI• CG 20 38 – Additional Insured – Owners, Lessees or Contractors – Automatic
Status for Other Parties When Required in Written Construction Contract Agreement
17
11
#IRMI2016
2013 Changes
18
#IRMI2016
2013 Changes
• 45 states have anti-indemnification statutes that restrict, modify, or invalidate indemnification agreements in construction and other contracts
• These statutes frequently prohibit the transfer of an indemnitee’ssole (or concurrent) negligence through an indemnification agreement
• ISO may be attempting to “genericize” the endorsement to conform to the various state laws without the need to create state-specific endorsements
• The ultimate impact of this change will remain unknown until ISO issues clarification or there are judicial decisions
19
12
#IRMI2016
2013 Changes
20
#IRMI2016
2013 Changes
21
13
#IRMI2016
Other Issues – Contractual Liability
22
#IRMI2016
Blanket Additional Insured Endorsements
• The use of blanket AI endorsements restricts the ability to provide notice of cancellation. When blanket endorsements are used, the insurer does not have a list of additional insureds or addresses. They are not aware of additional insureds' identities until a claim is made. Obviously insurers can't provide notice of cancellation to unidentified parties.
23
14
#IRMI2016
Blanket Additional Insured Endorsements
24
#IRMI2016
Resources
• Statutes and Regulation• www.iiaba.net/VU/NonMember/WilsonCertLawsRegs.htm
This file is set up for duplexed printing. Therefore, there are pages that are intentionally leftblank. If you print this file, we suggest that you set your printer to duplex.