A contractor wins a new job, then learns the insurance does not meet the job’s terms. I get calls like this when a client needs higher limits or changes to an existing policy. I have also seen payment held up because a certificate did not clearly show the coverage already in place. Either way, the owner has a problem to solve before the work can move ahead.
Three requests come up often: additional insured status, a waiver of subrogation, and primary and noncontributory coverage. These terms help decide who gets protection, which policy pays first and whether an insurer can seek its money back. We need to check each request against the policy rather than treat them as one task.
Why does your customer want to be an additional insured?
An additional insured is a person or business given some protection under someone else’s policy. Your customer may ask for this because it could be sued over harm caused by your work. The exact form controls which claims it covers. Being listed does not give the customer coverage for all of its own work.
Suppose a plumber causes water damage and both the plumber and the company that hired them get sued. The plumber’s policy may help defend the other company if its additional insured coverage applies. We also need to check when that protection applies. Some forms cover work in progress, while claims from finished work need a separate review.
What does primary and noncontributory mean?
This wording deals with which policy pays first and whether another policy shares the cost. For a covered claim where it applies, your policy responds ahead of the customer’s own insurance. Your insurer also agrees not to seek a share from that other policy. That does not make the customer’s policy an umbrella. Both policies still have their own terms and limits.
What does a waiver of subrogation do?
After paying a claim, your insurer may seek money back from a party that caused the loss. That right is called subrogation. A waiver gives up that right against a party named or covered by the waiver. It does not give that party coverage or decide which policy pays first.
You may see a waiver request for workers’ comp, too. It can stop the insurer from seeking money back from a customer after paying a worker’s covered injury claim. That is different from adding the customer as an insured on general liability. Each request needs to be checked on the right policy.
How I check the request against your coverage
Clients often send me a sample certificate and a list of terms or forms the job requires. I start with their policy to see what is there now. Once we agree on the changes needed, I can work with the carrier on an endorsement, which changes the policy. If the current carrier cannot meet the need, we can look at a new quote.
I would also ask for the contract’s insurance terms, not just a sample certificate. A certificate is proof of coverage, not a way to add coverage that is missing. If the policy already fits, we can address how to show that on the certificate. If it does not, we need to address the gap first.
A job may have terms for auto, workers’ comp and an umbrella as well as general liability. A change to one policy may not meet all of them. I can help check the insurance, while a construction attorney should review the legal duties in the contract.
When blanket provisions can save time
I prefer blanket forms when they fit the work my client does. These can cover customers who meet the form’s terms without listing each one by name. That saves us from adding a new name for each job. We still need to check the cost and what the form provides.
Blanket coverage does not mean every customer and job is covered. A form may require a written contract to be in place before work or a loss. It may also limit who gets protection or whether it covers claims from completed work. I would rather check those points early than assume the word “blanket” settles them.
Use the same approach when you hire subcontractors
These requests work both ways. Your customer wants protection from claims tied to your work. If you hire subcontractors, you have a reason to ask for protection tied to their work, too. I want to help clients build a process for that before a dispute arises.
For a business that hires subs, I would start with clear insurance terms reviewed with legal counsel. Then we can help check the proof of coverage and required forms before the subs begin work. I would also help the client decide who will track dates and request renewals. The process should keep working after the first certificate gets filed.
Before your next job, send us the contract’s insurance terms and any sample certificate. At Craddock Insurance, we can compare them with your policies and explain what needs to change. We can also help plan what to ask of your subs. That gives you a clearer path to start work with fewer last-minute surprises.
This article provides general information, not legal advice. Coverage depends on policy terms and the facts of a loss. Ask qualified construction counsel about the legal duties in your contract