This claim involves contractual issues between a general contractor and an electrician. The electrician got his wires crossed and caused some damage, and now there's lawyers throwing around phrases like "contractual indemnity" and "additional insureds" and "insured contracts."
Notable Timestamps
[ 00:34 ] - Nate is a longtime personal lines adjuster switching to commercial lines and taking over a claim from a retiring adjuster.
[ 01:40 ] - Call (630) 509-8704 to leave a voicemail with your anonymous adjuster story! Mike shares his own story! What can you do about a drunken sailor...
[ 04:00 ] - CGL policies typically exclude liability assumed under a contract. Typically, two-party contracts are not occurrences because a breach of contract is not a matter of chance or fortuity. The GL policy is not a performance contract or a guarantee of work product or quality.
[ 06:35 ] - However, CGL policies have an EXCEPTION to the EXCLUSION that keeps out two-party contracts. The exception permits coverage for "insured contracts"-- basically three-party contracts like the one where a general contractor contracted with an insured electrician, and then the homeowner's property got damaged.
[ 09:15 ] - Contractual indemnity is created by a contract to assume another party's tort liability, whereas an additional insured is created by an endorsement in the insurance policy specifically naming the party to be insured.
[ 11:32 ] - An Additional Insured endorsement may include some limitations, but otherwise the named additional insured has the same rights as the insured who signed up for the policy.
[ 11:55 ] - Additional Insured have broader rights than a contractual indemnitee, but they also have broader responsibilities: the same responsibilities as the original insured to cooperate, act timely, etc.
[ 13:21 ] - A contractual indemnitee can refuse responsibilities like providing certain documents, but miss out on perks like getting a defense provided by the insurance company.
[ 14:45 ] - The CGL policy provides these differing options as a way of providing flexibility for different situations.
[ 15:12 ] - Not to get "distracted", but the CGL also carves out an exception for "sidetrack" agreements-- agreements pertaining to the train tracks extending out of factories and warehouses.
[ 16:50 ] - Mike provides a recap of the scenario and the points above.
Your PLRB Resources
50-State survey on Indemnity Agreements - https://www.plrb.org/documents/agreements-to-indemnify-and-general-liability-insurance/
CE Course on Contractual Indemnity and Additional Insured Liability - https://www.plrb.org/courses/contractual-indemnity-and-additional-insured-liability/
Advanced Issues: Road Trip Through the CGL Policy recorded webinar - https://www.plrb.org/courses/advanced-issues-road-trip-through-the-cgl-policy/
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/ask-plrb/) at no additional charge to you or your company.
Subscribe to this Podcast
Your Podcast App - Please subscribe and rate us on your favorite podcast app
YouTube - Please like and subscribe at @plrb
LinkedIN - Please follow at "Property and Liability Resource Bureau"
Send us your Scenario!
Please reach out to us at 630-509-8704 with your scenario! This could be your "adjuster story" sharing a situation from your claims experience, or a burning question you would like the team to answer. In any case, please omit any personal information as we will anonymize your story before we share. Just reach out to scenario@plrb.org.
Legal Information
The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
Music: "Piece of Future" by Keyframe_Audio. Pixabay. Pixabay License.
Font: Metropolis by Chris Simpson. SIL OFL 1.1.
Icons: FontAwesome (SIL OFL 1.1) and Noun Project (royalty-free licenses purchased via subscription).
Sound Effects: Pixabay (Pixabay License) and Freesound.org (CC0).
