Construction Law

Subcontractors Continue to be Plagued by Additional Insureds featured image

Subcontractors Continue to be Plagued by Additional Insureds

Parties who are additional insureds (an entity that has been added to another entity’s insurance policy that do not have to pay premiums) on subcontractor Commercial General Liability policies have little incentive to take any preventive measures to ensure its negligence does not hurt a third party. Subcontractors that are named insureds must accept a number of risks that include: policy dilution that can leave them without coverage; increased premiums that are a result of lower experience ratings caused by broad additional insured coverage; and payment of the deductible that results from additional insured claims (even though the subcontractor may be completely without fault). Next time you are asked to name a party as an additional insured, recognize the potential liability and increased costs.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.