GC Wants to Be AI on BOP and Excess

[URDRWHO]

I have a client that received a request from a general contractor and the GC wants AI status on my clients BOP and the Umbrella.
Client has the broad form AI form that grants CERTIFICATE HOLDER IS RECOGNIZED AS ADDITIONAL INSURED ONLY ON GENERAL LIABILITY POLICY. ALL JOBS "WHERE UNDER WRITTEN CONTRACT REQUIRING ADDITIONAL INSURED STATUS"

The Umbrella is a form that flows to anyone that is AI under the GL. Under the BAP AI isn't needed because of the “Who Is an Insured" part of the BAP.

Underwriters aren't going to manuscript an AI status on the BOP, it isn't needed or the Umbrella because it isn't needed. I am not going to mark the Acord showing that AI is granted on the BOP or Umbrella because the GC is not shown as AI on the policy. Coverage for AI is granted through normal policy language.

I've told the administrative person at the GC that what she is requesting is not needed but she is standing her ground. My IRMI texts all agree with my stance.

The BAP addresses insured status for the named insured’s indemnitees which coverage is built into the form itself, you do not need an endorsement --- BAP is automatically in compliance with an indemnitee’s demand for additional insured status,as long as the indemnitee is someone who is liable for the named insured’s conduct.

Any ideas how to get the GC to accept?

 

[djs]

The problem you have is this statement:

Client has the broad form AI form that grants CERTIFICATE HOLDER IS RECOGNIZED AS ADDITIONAL INSURED ONLY ON GENERAL LIABILITY POLICY. ALL JOBS "WHERE UNDER WRITTEN CONTRACT REQUIRING ADDITIONAL INSURED STATUS"

Conflicts with this statement:

The Umbrella is a form that flows to anyone that is AI under the GL.

I would not accept this if I was the GC either.

Beyond that, you have to understand that the person who is doing the checkoff list to make sure all the requirements are met are required to have what they see as a properly filled out certificate.

I don't have good answer for you. If you feel comfortable that they are covered as an additional insured, then you can mark them as an additional insured without hesitation, putting in the comments that it applies to contracted work.

To the person you are working with, if you are not willing to mark them as an additional insured, why would they trust you that they are an additional insured? I do understand your point here, but it seems strange to someone looking in from the outside.

Dan

 

[VolAgent]

As a non-P&C agent, I have to agree with Dan.

You tell me I'm an additional insured, but you won't put it in writing for me? I'm not buying it. In fact, I'd lose all trust in you and start trying to find someone else for my insurance needs. It sounds like a claim nightmare waiting to happen.

 

[URDRWHO]

I decided that since by language the excess gives coverage I'll check mark the box. Kind of like the AI broad form.

No they should lose trust if I (like so many agents) just willy nilly fill in that check mark without have any AI endorsement on the policy. I support the States that are making it illegal for an agent to fill in a COI before an AI endorsement.

I don't spend all the money to keep my IRMI designation and spend time studying all their tests just to take the easy road. I will err on the conservative side. I would lay $100 on the table that the GC would think they are always AI on the policy, even without a signed contract that requires AI status. My client showed the Umbrella policy to the GC and it is written " Any additional insured under any policy of "underlying insurance“ will automatically be an insured under this insurance. If coverage provided to the additional insured is required by a contract or agreement, the most we will pay on behalf of the additional insured is the amount of insurance required by the contract, less any amounts payable by any "underlying insurance" Additional insured coverage provided by this insurance will not be broader than coverage provided by the “underlying insurance".
So when they see what the policy provides, that it follows the GL policy, why the check mark, it is a redundant request? With a check mark, does the GC think they are getting more than the policy gives them? I bet they do and I also bet that a great majority think the COI supersedes the wording in the policy.

I again asked the BAP underwriter and he said -- "[FONT='Calibri','sans-serif']Regarding the auto, we take the same view as you and there is no need to add a.i.s to the auto policy for all known reasons."

[/FONT]This COI request is from a GC that wants it for their files, my client has not done work for the GC in over two years. I could possibly go the the mat for them and tell the Ins Co that the insured can not go on the job site without an AI endorsement on the BAP. Perhaps the underwriter will go from "we prefer" to we will but for a cost. But I'm not going to create an added cost for no reason.

I was just searching for a way to get the GC administrator to understand her requests were redundant. My hesitancy in marking those boxes is because I don't know what the GC is thinking? As they were shown, the BAP and Umbrella does have language that covers the situation what is the (GC) trying to achieve? Do they think they are endorsed on the policies if I place a check mark in the Umbrella?

When crap happens and the GC says in court, the Subs agent check marked the box and we (GC) assumed that meant we were on the policy. You mention a claim? If the GC "thinks" that the AI check mark is giving them more than the policy wording, that is a problem in waiting.

Even though the Acord form clearly and in bold show that a COI is only a matter of information, how many receivers of COI's read it?

Recently there was a big suit in my State about sending COI's with AI marked in the liability section but the AI was never added to the policy. The reason given by the agent at the agency was that she was trying to save her client money because adding an AI cost money.

Been doing this stuff since 1983 and yes there are times I will be conservative and go into my mode of over-thinking but I've never been sued and my clients trust me because I over-think things. I once has a multi-$million property claim that lasted 7 years and felt comfortable the entire time that I had dotted my "i"s and crossed my "t"s.

As a non-P&C agent, I have to agree with Dan.

You tell me I'm an additional insured, but you won't put it in writing for me? I'm not buying it. In fact, I'd lose all trust in you and start trying to find someone else for my insurance needs. It sounds like a claim nightmare waiting to happen.

 

[Guest]

Your U/W will tell you if they allow the AI, some comapnies dont, some will charge for adding one, some have a blanket fee for multiple AI.

This is a carrier by carrier situation, and some will allow some phrases while some won't.

 

[URDRWHO]

UW isn't going to do it on the BAP.

As far as the CGL I always push for construction people to buy the broad form AI. That way as long as it is required by contract, everyone is happy. My mantra is always before signing a contract send me the insurance requirements. But we all know that the contractors sign the contract and then request a COI only to find out that I wouldn't issue a COI until the GC was indeed added to the policy. There are volumes of text on the pitfalls of AI status and there are plenty of agents that will issue a COI before the GC is added to the policy. It is playing Russian roulette and someday they could be the unlucky one to find out that the insurance company never added the GC and said agent didn't catch it.

Yep, broad form AI is the way to go on CGL.

As far as the people that don't understand the difference between having the coverage of AI and being an added AI.....allow me to explain why I say they are covered as AI but not an AI on the policy.

A named insured contractor or subcontractor under the business auto policy is automatically in compliance with an indemnitee’s demand for additional insured status, provided the indemnitee is an entity liable for the named insured’s conduct. The problem is that some indemnitees don't trust the “Who Is an Insured” provision of the indemnitor’s BAP as to their insured status." BAP addresses insured status for the named insured’s indemnitees and builds the coverage into the form there is no need for an endorsement.

Now just because a GC doesn't understand doesn't mean that it isn't so. The GC does have the advantage of AI benefits but doesn't need to be endorsed on the policy. To complete the AI check mark on the BAP portion of the COI would mean that you have added the GC to the policy. So the GC can have the AI risk benefit and not be endorsed. So when I say the GC has the AI benefit but I won't check mark it means that the GC hasn't been added to the policy. No need to do it.

Now this all led to insurance company creating what is known as the designated insured” endorsement. The endorsment does nothing except make the GC feel like he has accomplished something. "These endorsements, don't provide any coverage that the “Who Is an Insured” clause did not already provide, gives the named insured and its indemnitee some specific documentation that additional insured status was in effect." In other words it is telling them hey WAKE UP ....the coverage you request was already in effect but here we are telling you AGAIN in a specific form. Even if I had the designated insured endorsement, and if the GC isn't spicifically as AI would you still complete the check mark? I know what I would do.

Your U/W will tell you if they allow the AI, some comapnies dont, some will charge for adding one, some have a blanket fee for multiple AI.

This is a carrier by carrier situation, and some will allow some phrases while some won't.