National Roofing Legal Resource Center

Contract modification addresses additional insureds

This month's contract modification is intended to be used when a roofing contractor is signing a contract form prepared by the owner or general contractor. Many general contractors and owners include language in the insurance section requiring the roofing contractor to name other parties as additional insureds on his or her insurance policy by referencing a specific form. An example of such a requirement follows:

"Contractor, Owner and all other parties required by contract shall be included as insureds on Subcontractor's CGL Policy, using ISO Additional Insured Endorsement CG 20 10 11 85 or an equivalent coverage to the additional insureds."

The 20 10 11 85 endorsement is a broad form that can be construed to require coverage for the negligence of others. Not all roofing contractors are able to obtain this endorsement from their carriers. In addition, some state insurance commissioner's offices do not approve use of the form.

Failing to provide the required insurance endorsements may be a material breach of your contract. Even if a particular roofing contractor is able to obtain the endorsement, the language is so broad that it should not be agreed to.

Many roofing contractors gloss over the reference to specific endorsements. The better practice is to delete references to specific endorsements and instead simply agree to name those parties as additional insureds. In the above example, this would involve deletion of the text beginning with the words "using ISO Additional Insured Endorsement …" through the end of the sentence so that the clause is revised to read:

"Contractor, Owner and all other parties required by contract shall be included as insureds on Subcontractor's CGL Policy."


7/24/2012



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