Additional insured

A defense and an indemnity under someone else's policy

A sub's certificate lands in your inbox with a “Y” beside ADDL INSD, your subcontract required it, and you have to decide whether that closes the question. Before you decide, be clear about what you were requiring. Most GCs write the additional-insured clause because their prime contract told them to, and never get told what the status is actually worth.

It is worth this. When a claim from your sub's work names you — and plaintiffs' attorneys name everyone up the chain — the sub's insurer owes you two of the same duties it owes the sub. It has to defend you, and within the policy limits it has to pay. Not on the same footing as the sub, though: the grant is narrowed to liability their work caused, and capped, as the rest of this page sets out. You are borrowing an insurer, not collecting a promise from a subcontractor.

Separate those two duties, because they behave differently. The defense is the one that shows up first. The insurer hires and pays the lawyer, and on the standard ISO general liability form those costs sit outside the limits rather than eroding them. Some carriers write eroding-limits forms, where defense spend eats the limit. That is a fair question to put to their agent. In most states the duty to defend is also broader than the duty to pay, triggered by what the complaint alleges rather than by what is finally proven. How that runs in your state is a question for your own counsel, not for this page.

The indemnity is the settlement or judgment, paid out of your sub's limit. That is the part people picture, and it is the part that keeps a claim off your loss runs and out of your next renewal. It is also why an indemnification clause on its own is thin comfort: an indemnity is a promise backed by a subcontractor's balance sheet, and the endorsement is a promise backed by an insurance company. What to require before a sub starts treats them as two requirements for that reason.

Two things this status is not. It is not your name in the CERTIFICATE HOLDER box, which is a mailing label — certificate holder vs additional insured sets the two side by side. And it does not decide whose policy pays first: being an additional insured on a policy that sits excess of your own is worth far less than it looks, which is what primary and non-contributory is for. Require both, in the same sentence of the subcontract.

The 2004 rewording that narrowed what you get

Additional insured is not a fixed grant that has sat still since someone invented it. The words deciding when the endorsement responds were rewritten in 2004, and the before and after answer different claims. This is the single most important thing on the page and almost nobody mentions it to a GC.

The editions before 2004 extended coverage to liability “arising out of” the named insured's operations for you. That is loose, connective language. A claim tied to the sub's scope could pull their insurer to the table even where the negligence turned out to be somebody else's — frequently yours.

The 2004 revision replaced that phrase with liability “caused, in whole or in part, by” the acts or omissions of the sub or of anyone acting on their behalf. The trigger moved from connection to fault. The words “in part” are doing real work: your sub does not have to be wholly to blame for the endorsement to answer. But where the failure is entirely yours, a modern endorsement may not answer at all.

Hold that against the claim you actually lie awake about. One of your sub's own crew falls through an unguarded floor opening. The opening was your superintendent's housekeeping, and the sub did nothing wrong. Under the older wording the injury plainly arose out of the sub's operations for you, so their carrier came in. Under the current wording nothing the sub did caused it, and the claim may sit with your policy instead. That is not a drafting nicety. It is the difference between someone else's insurer defending you and your own.

So the four-digit edition date at the foot of the endorsement is part of the document, not a printer's mark. Post-2004 status is narrower and still very much worth holding — it is what the market issues today. But do not price it in your head as the older grant. And do not assume generous wording typed into the certificate's description box widens it. Every endorsement form and edition in one place lays the versions out. Whether a particular edition is acceptable on your job is a call for your counsel and your own agent.

There is a second revision, and it gets folded into the first constantly. Eleven years earlier, the 10 93 edition had already carved completed operations out of CG 20 10. ISO issued CG 20 37 alongside it in 1993 so that cover could be bought back as its own form. So a defect surfacing two winters after the crew left needs the second endorsement, whatever the trigger wording says — CG 20 10 vs CG 20 37 covers that split in full.

Blanket, scheduled, and the clause you wrote yourself

Endorsements grant the status in two shapes. A scheduled form has a schedule box with your company typed into it. A blanket form names nobody, and instead grants automatic status where a written construction agreement requires it. Both are real coverage, and blanket is more common. Which numbered form does which is laid out form by form. Carry one distinction into your subcontract, though. CG 20 33 reaches only the party your sub contracted with, which is you. CG 20 38 is the form that carries the status to the parties above you.

Blanket wording carries a condition that catches people. Automatic status attaches where a written agreement requires it and, on these forms, where that agreement was executed before the loss. Read that as a window, not a deadline. A subcontract signed three weeks after mobilization still turns the status on from the day it is signed — but anything that went wrong in those three weeks falls outside it, and that is the stretch where an unsigned contract and a crew already on site tend to coincide. Note too that the blanket ongoing-operations forms do not reach completed operations. CG 20 37 is still a separate ask.

Then the part that catches experienced contractors. Since the 04 13 editions, the endorsement expressly limits itself to your own paperwork: coverage no broader than your written contract requires, and a limit that is the lesser of what you required and what the policy carries. Require $5M from a sub who bought $1M and the endorsement hands you $1M, in writing. Require “additional insured status” and nothing else, and the endorsement gives you the thinnest reading of that phrase it can.

Which makes your insurance clause an underwriting document. A clause naming CG 20 10 and CG 20 37 by number, ongoing and completed operations, primary and non-contributory, and a stated limit, is what the endorsement then reads back to you. A clause saying “Subcontractor shall name Contractor as additional insured” is answerable with almost anything.

The exclusions that hollow out a valid endorsement

Here is the failure mode nobody warns a GC about. Additional-insured status is coverage under your sub's policy, so it inherits everything that policy excludes. You are not buying a new policy in your own name. You are borrowing theirs, holes included. The endorsement can be flawless, correctly named and current, and still answer nothing — because the policy underneath excludes the exact work you hired that sub to do.

These are classes of thing rather than a checklist, and they turn up on trade-contractor policies constantly:

• Residential, condominium and habitational exclusions. Many carriers writing small trade contractors bar condo, townhome, tract-housing or multi-family work outright, or above some unit count. If you build condominiums, this exclusion decides whether the endorsement means anything at all.
• EIFS and exterior-wall exclusions. Exterior insulation and finish systems drew a generation of moisture-intrusion litigation, and the exclusion that followed is close to standard on some books. Related wording bars water or moisture intrusion generally, which is broader than it sounds.
• Damage-to-your-work exclusions. The general liability form already excludes property damage to the insured's own completed work, with a carve-out for work performed by a subcontractor. Some carriers delete that carve-out by endorsement — and it is precisely the defect claim you wanted completed-operations status for.
• Action-over and cross-suit exclusions. These bar claims brought by an employee of the insured against another insured. Read that again from where you sit: the injured worker suing you is one of the most likely routes a claim ever reaches your sub's policy, and this exclusion closes it.
• Classification and operational limits. Coverage tied to the class codes on the declarations, or capped by height, depth or square footage. A policy classed for carpentry does little for the day that crew spent on your roof.
• Professional services exclusions. If a sub does any design — a design-build mechanical package, a shop drawing that becomes the design — the general liability policy is not where that liability lands.

None of this is visible on the certificate. The ACORD 25 has rows for limits and dates and two Y/N columns, and no box anywhere for an exclusion. So the request has to go past the certificate. Ask the issuing agent for the schedule of forms and endorsements from the declarations page. It lists every endorsement attached to that policy by number. Then ask the three questions that matter for your job.

Naming the entity that actually has to be covered

Status runs to a legal entity, and most contractors are more than one. If the subcontract was signed by your construction LLC and the endorsement schedules your parent holding company, the coverage belongs to a different company than the one being sued. Give the agent the exact legal name from your signature page — suffix, punctuation and all — rather than the name on the truck.

Then look upstream, because your prime contract has probably already spent this requirement for you. Owner contracts routinely oblige you to procure additional-insured status for the owner, the developer, the construction lender, the property manager, and often their officers, directors and employees. That obligation flows down to your subs or it does not get met, and you will be the party in breach.

The practical move is unglamorous and works: copy the list of required additional insureds out of the prime contract's insurance article into your subcontract verbatim, rather than paraphrasing it. Paraphrase is where an owner's affiliate quietly drops off. Then name the form as well as the parties. Your subcontract can list the owner and the lender perfectly and still be answered with a CG 20 33, which reaches neither of them. Where there are parties above you, ask for CG 20 38 by number.

Watch schedules that read “ABC Construction and its affiliates” or name a project instead of a party. Affiliate wording is not a substitute for the entity that signed, and a project-specific schedule stops working the moment the sub follows you to the next job.

What to ask the issuing agent to send

Ask the agency named in the PRODUCER box in the top-left corner of the certificate. Not your sub. They will forward the request to that same agency, which issues the same form with the same tick, and you will have gone round the loop for nothing. And ask for the endorsement, not for a certificate.

The reason a fresh certificate is never the answer is printed on the certificate. It “does not affirmatively or negatively amend, extend or alter the coverage afforded by the policies below.” A newer certificate is a newer report about an unchanged policy; the report has no power to add you to anything, which is the whole of why a certificate proves nothing on its own. The five-minute verification routine is the procedure for everything else on that form.

1. 1Ask by form number and edition date — CG 20 10 for ongoing operations, CG 20 37 for completed operations, or the blanket ongoing-operations forms — CG 20 33, or CG 20 38 where parties above you have to be added. Completed operations is a separate ask either way. “Send the CG 20 10” gets you whatever is attached; asking for the edition gets you something you can read.
2. 2Give the exact legal entity names, including every upstream party your prime contract requires you to add.
3. 3Ask for the schedule of forms and endorsements from the declarations page, so the exclusionary endorsements are visible rather than inferred.
4. 4Ask where the primary and non-contributory wording lives — inside the additional-insured form or on its own endorsement.
5. 5Diary the general liability expiry date. An endorsement lives on a policy and dies with it, so the renewal is a fresh question rather than a formality.

This note asks for all of it at once, and heads off the two replies that waste the most time — another certificate, and a letter confirming you are an additional insured:

Hi [Agent name],

We're the general contractor on [Project]. Our signed subcontract with [Sub name] requires additional-insured status on their general liability for [Your Company — exact legal name as signed], and our prime contract also requires us to add [Owner / lender / other named parties].

Could you send:

1. The additional-insured endorsement pages themselves, with the edition date printed at the foot — typically CG 20 10 for ongoing operations and CG 20 37 for completed operations. If the status is granted on a blanket form, please confirm it is CG 20 38 rather than CG 20 33, since we have parties above us to add and CG 20 33 does not reach them.
2. The schedule of forms and endorsements from the declarations page, so we can see what else is attached to the policy.
3. Where the primary and non-contributory wording sits — inside the AI endorsement or on a separate form.

Three questions we'd rather ask now than at claim time: does this policy carry a residential or habitational exclusion, is there an action-over or employee-injury exclusion, and has the subcontractor exception to the damage-to-your-work exclusion been deleted?

If the status is granted on a blanket basis that's fine — our subcontract was signed before work started and does require it.

What we don't need is another certificate, or a letter confirming we're an additional insured. The endorsement pages are what we file.

Thanks,
[Your name]
[Your Company] — [phone]

Then read what arrives instead of filing it unopened. Check the policy number against the certificate. Check the edition date. Check the effective dates cover your whole scope, including the warranty period. Check the entity named is the one that signed, and on a blanket form check which one you were sent. Four minutes there is the difference between holding additional-insured status and holding a page about it.