by

Robert J. Marshburn, CRM, CIC, ARM, CRIS, CISC, CCIP

Founder & CEO | Certified Risk Managers LLC

CertifiedRiskManagers.com 

BEWARE! – ALL 2013 & 2019 ISO Additional Insured forms provide NO Coverage UNLESS specifically Required by Written Contract or Agreement! 

Your written Agreement essentially becomes a Policy endorsement that can limit, restrict, or exclude coverage if it is not written properly!

1.    ALL of the 2013 & 2019 ISO Additional Insured Endorsements with the edition date of 04.13 and 12.19 contain provisions limiting and restricting their Insurance coverage for the Additional Insured to ONLY the requirements in the written contract (or agreement) between the parties.

 

2.    COVERAGE—The Contract must explicitly require the extent of coverage or there is NO coverage! 

 

3.    LIMITS—Even if your Contractor’s policy contains higher limits of liability than your contract requires, they will NOT apply in behalf of the Additional Insured or Indemnified Party (Indemnitee) unless it is required in the contract!

Past changes to the Additional Insured endorsements that previously narrowed and limited coverage have been carried over into the 2013 & 2019 forms above and should be analyzed in connection with them.  Please see the ISO 10/01 CGL Policy & Endorsements that separated "ongoing operations" liability and "completed operations" liability into different endorsement forms. Please also see the ISO 07/04 Endorsements that discontinued the coverage from "liability arising out of" operations performed by the named insured that defined the term "arising out of a contract" as “a claim that would not exist "but for" a contract.”.  This led to court decisions that applied the coverage even when not the result of the named insured’s negligence or scope of operations performed for the additional insured. The ISO 04 13 & 12 19 forms follow the language of the 07 04 forms that changed the Additional Insured coverage language for a need to be "caused in whole or in part by" the named insured for coverage to apply... and no coverage for merely "arising out of" the named insured's contract with the Additional Insured.. 

You must update your Contracts to require full coverage and limits to avoid these reductions or exclusions of coverage in the new forms!  No clear Contract requirement = NO COVERAGE even if you are named as an Additional Insured under these 2013 or 2019 forms!

There is some good news for 2 of the newer forms –

1.   The new ISO CG 20 38 provides Additional Insured “ongoing operations” liability coverage from the Contractor you hire as well as for Subs he may hire on an "Automatic" basis PROVIDED it is required in the Contract.  The CG 20 33 may provide this coverage for only the Contractor you hire and not any of his Subs.  In this case the Subs must name you individually. 

 

2.   The new ISO CG 20 01 Endorsement provides explicit Primary and non-contributory coverage.

As with the Additional Insured forms above, both of these endorsements are activated only if the named insured Contractor has agreed to these terms in a Written Contract or Agreement.

ISO 2019 Additional Insured Endorsement forms (12 19 edition date) –

AUTOMATIC COMPLETED OPERATIONS Additional Insured Endorsements:

2.     CG 2040 12.19 — NEW AI endorsement that extends Automatic Completed Operations coverage, designed to work with the CG 2038 that extends automatic Ongoing Operations coverage to additional insureds even if they have no Contract Privity “with you”, but it is required by the Contractor hiring them to cover you.

All Automatic forms must be required in a “written contract or agreement” or there is NO Additional Insured coverage!