Insured Status Under the Contractor’s CGL Policy

The issue of requiring protection for design firms by having them named as additional insureds on the general liability policies of contractors is complicated. Without the professional advice of an insurance consultant knowledgeable in the endorsements available, the protection can be illusory.

Standard form agreements such as AIA Document A201-2017 and EJCDC C-700 require that architects and engineers be named as an additional insured on the contractor’s general liability policy. However, for such additional insured status to provide coverage to an architect or engineer, it is important that the additional insured endorsement not be triggered by the performance of services by the insured (contractor) for the additional insured (architect or engineer). In traditional design/bid/build projects, the architect or engineer does not have any contractual relationship with contractor, and the contractor is not performing work for the architect or engineer, but rather for the owner of the project. Most contractors carry a “blanket additional insured” endorsement on their general liability policy that provides additional insured status to any client for whom they perform work (subject to some contingencies). However, such coverage is not designed to trigger coverage for an entity for whom the insured contractor is not performing any work.

The Insurance Services Office (ISO) provides standard additional insured endorsements for general liability policies to address common relationships that result in one party being exposed to liability for another party’s actions or presence. One such endorsement, CG 2032 “Additional Insured—Engineers, Architects or Surveyors Not Engaged by the Named Insured” is specifically drafted to address the exposure architects and engineers have from Contractors working on the same project. In this endorsement, the additional insured status is triggered by a contractor’s errors or omissions in the contractor’s ongoing operations. A contract requiring the contractor to provide additional insured status to the architect or engineer must also be in place to trigger the additional insured coverage on this ISO form.

When requesting additional insured status under the contractor’s CGL policy, architects and engineers should request a copy of the endorsement used to grant such status. It is important to review the language of the provided endorsement with an insurance agent or broker to ensure that coverage for the additional insured is not tied to the performance of work by the contractor for the additional insured. Language such as ISO’s form CG 2032 recognizes the unique relationship between contractors and architects/engineers working on the same project, and appropriately triggers coverage for an architect or engineer.