A best practice is to request, in addition to the COIs, copies of the actual particulars that the contractor requests. Of course, the most protective practice would be to request a copy of the subcontractor`s entire directive. Often, however, contractors do not have time to conduct a full check of their subcontractor`s complete guidelines to confirm their compliance. The requirement for copies of relevant notes provides a balance between ensuring compliance and efficiency. There are two basic types of additional endorsements provided: broad “support” and closer support “in whole or in part”. Both provide the upstream contractor with coverage for claims related to the subcontractor`s work, but they are not equal. Approval “of itself” has been held by many courts to cover the additional insured for its own liability – even its exclusive negligence – as long as the liability is related in some way to the work of the subcontractor. On the other hand, confirmation “in whole or in part by” was generally considered to be additional coverage of the insured for his partial negligence, provided that the subcontractor was also, at least partially, guilty. Additional confirmations can take different forms.
The first is a planned confirmation that specifically identifies the entity or entities that are additionally insured. However, subcontractors more often rely on flat-rate supplementary certificates which automatically confer additional insurance status on certain companies if certain conditions are met. Typical additional lump sum supplementary attestations require the insured in question (i.e. the subcontractor) to agree, in a written contract or agreement, to include the upstream party as an additional insured under the policy. As a result, contractors and other upstream parties are better protected when they require subcontractors to give a broad “result” of additional confirmations. However, not all subcontractors will be able to obtain such approval, as it is now the norm for insurers to issue the narrower approval “wholly or partially caused by”. Main contracts generally require the contractor to require its subcontractors to collect and maintain the same types and limits of insurance that the contractor must obtain and maintain. Failure to comply with this provision may result in the suspension of the right holder for infringement. Contractors should ensure that their subcontracting contains the insurance requirements of the main contract and certify that subcontractors meet those requirements. Therefore, if a subcontractor has a policy with limits of $2 million, but the subcontract only requires $US 1 million, the contractor is only entitled to $1 million as additional insurance under the subcontractor`s policy.
Therefore, contractors could consider including language in their subcontracts, provided that the limits indicated are only minimum limits and that, where the subcontractor receives a policy with limits above the specified minimums, the contractor, as an additional insured, is entitled to the full limits of the policy. . . .