Contractors have many special and unique coverage needs. UIA understands the special insurance needs of contractors. We insure many contractors providing an array of coverages including:
- Business Owners Policy
- Builders Risk
- Business Income
- Business Personal Property
- Contractors Equipment
- General Liability
- Inland Marine/Equipment Floater
- Professional Liability
- Umbrella Policy
- Workers’ Compensation
Along with the special needs of contractors, separate endsorsements are available as requested/required by contract. These endorsements are becoming more common place and it is important for you to understand what these endorsements mean to you and your company.
What is an additional insured?
In simple terms, an additional insured is any entity, not shown in the part of the declarations page showing the named insured that is provided liability protection on an insured’s insurance policy. Sometimes the additional insured is automatically covered by a policy; in other cases, an endorsement will be needed to add an additional insured to a contract.
Additional insureds are automatically protected by several insurance policies including business auto, garage, and commercial general liability. An employee driving the employer’s truck or car is an example of an additional insured that is automatically covered.
Adding the leasing company to an insured’s business auto policy is an example of an additional insured’s being covered by using an endorsement to add an entity to an insurance contract. Occasionally a request is made to add an additional insured to the policy as a named insured. This cannot be done. There are several ways to distinguish the difference between a named insured and an additional insured. Named insureds can cancel an insurance policy, pay premiums and void or nullify the insurance contract. Additional insureds cannot cancel the policy, pay premiums or nullify the policy.
Waivers of Subrogation
Losses typically happen through someone’s negligence. In general, the negligent party should be liable for such negligence.
Your insurance company could choose to sue a third party to recover the amount of a claim they paid if the loss was caused by that third party. This is called subrogation.
Some contractual agreements, including contractual construction agreements, require you to waive your right of subrogation (and therefore your insurance company’s rights) against them in the event of a claim.
Waivers of subrogation may be requested of General Liability Policies, Workers’ Compensation Policies allow you to waive your rights of subrogation as long as it is done in writing and prior to a loss.
The implementation of waivers of subrogation can be an excellent risk management technique, but the following rules should be followed:
- Rights of subrogation should be waived only to the extent of your available insurance recovery. (You don’t want to be faced with waiving your rights of recovery, then having a $2,000,000 loss when your insurance policy limit is only $1,000,000).
- Waivers should be mutual. If you are waiving your rights of subrogation, the other parties of the contract should waive their rights against you as well.