Additional Insured & Blanket Additional Insured

The scenario is that you, usually as a subcontractor, have the 5th, 10th, or 100th request to name someone as an Additional Insured on your Certificate of Insurance. You keep getting charged a fee each time this happens and you hear about this mysterious Blanket Additional Insured endorsement that you can add to your policy one time and you won't keep getting nickel and dimed to death by your general liability insurance company.

Another other situation would be where you are a Building Owner, General Contractor, Prime Contractor, or even a Subcontractor who is hiring subs and you are getting some pushback because your subcontractors do not want to pay the fee to add you as an additional insured.

Our third situation would be similar to the second one, but the Subcontractor says that you are included on their Blanket Additional Insured Endorsement because of the contract you had them sign, and their insurance agent (rightfully) will not check the Additional Insured Box on their COI.  However, you are still an additional insured under their policy.

These are the times when most contractors learn about the magical Blanket Additional Insured Endorsement.

 

Before we start to run, let's make sure we can crawl.  Really quickly, what is an additional insured?

An additional insured endorsement is a document added to a General Liability, Auto Liability, Professional Liability, Cyber Liability, or other type of Liability Insurance Policy that changes the original policy language to add protection for the Additional Insured in the event the Named Insured (person or business whose name is on the policy) does something to get you (the Additional Insured) sued.

This suit generally comes about because of a mistake that the Named Insured made and because you had something to do with the Project, Product, or Place (yes, I like alliteration when I can make it happen).  As always, you do have to look at the policy limitations and exclusions to make sure there is a trigger for the coverage.  Because of the Additional Insured Endorsement, the subcontractor and their insurance company will be contractually obligated to defend you and pay damages against you if the subcontractor makes a mistake that leads to you being sued. This Risk Transfer technique is a critical first step in your Risk Management Program as it will help to defend you and pay judgements against you when lawsuits are brought against you because of your subcontractor's negligence.

 

What is blanket additional insured?

Blanket additional insured is when a General Liability Insurance policy covers as Additional Insured a whole group of people or businesses who interact with the subcontractor rather than naming each one of them individually. Blanket additional insured endorsements can be used to give additional insured status to GCs, Property Owners, Architects, Engineers, and others without needing to change the policy each time there is a request to specific person or entity as additional insured.

 

What are the different Requirements of blanket additional insured?

Sometimes, blanket additional insured status is difficult to fall under, and sometimes it is easy to fall under. This is because blanket insured endorsements can be phrased in many different ways.

Some blanket additional insured endorsements will cover virtually anyone who works with the subcontractor, but this is rare. Typically, however, additional insured status needs to be asked for. Often, there needs to be an agreement between the subcontractor and the additional insured. This all depends on what the policy requires.

What this agreement has to look like can vary. In some cases, if the contractor emailed the subcontractor asking “Can you make me additional insured?” and the subcontractor said “Sure, I’ll work on that,” it could be enough of an agreement. In other cases, there may need to be a formal contract.

Further, in some cases there is a rule that this agreement has to be made before the occurrence leading to the insurance claim. Sometimes that doesn’t matter. This is why it is important to know what the policy says.

What are the Blanket Additional Insured Endorsement Forms?

There are two main Blanket Additional Insured forms.  The first is CG2033.  This is the standard Blanket Additional Insured endorsement you will see.  The name of the CG 2033 is Blanket Additional Insured - Owners, Lessees or Contractors – Automatic Status when required in a construction agreement.  Some insurance companies have their own verstion of the CG2033 form and it can be broader or more restrictive.

The second Blanket Additional Insured form is CG2037.  This form is named Blanket Additional Insured - Owners, Lessees or Contractors – Completed Operations. Again, some insurance compaies will have their own version of the CG2037 and it also can be broader or more restrictive.

These two forms CG 2033 and CG 2037 go together to provide protection for the General Contractor, Property Owner or whoever is covered by these endorsements.  

We have another blog that goes into more detail on both the CG 2033 and the CG 2037  and their importance.

 

Pro Tip: Always Read the policy language

Ask to see the policy language itself so that you can verify that you fall under the coverage of the blanket additional insured endorsement. You need to know what the policy says because every policy is different. Once you know what the blanket additional insured policy is, you can be sure to do what you need to in order to fall under it. It is also important to note that there are some things that additional insured status does not cover.

For in depth information about Insurance Certificates, click here to access our guide and Ebook with everything you need to know about Certificates of Insurance.

Click Here to Read our Definitive Guide to Certificates of Insurance

Contact Us

Veritas Risk Management, Inc. offers proactive risk management services covering a wide variety of topics. Veritas Risk Management, Inc. does not engage in the practice of law, accounting, or tax consulting.  We encourage everyone to consult with his or her own professional advisor for details concerning his or her specific facts, situations, and circumstances.

 

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