INDEMNITY AND ADDITONAL INSUREDS – FOR SUB CONTRACTORS

As a subcontractor, you can expect general contractors to insert provisions in your subcontract requiring you indemnify as well as to name them as an additional insured on your liability policy.  Depending upon what endorsements are attached to your policy, your policy may automatically provide additional insured coverage to general contractors whenever you execute a subcontract containing this requirement.  You should consult your policy and your agent to determine whether or not your policy contains this automatic additional insured feature.

Agreeing to indemnify or name a general contractor as an additional insured should not be done lightly.  Such a contract in effect gives away part of your own insurance coverage that would otherwise be available to protect you.  In the event of a jobsite accident or serious construction defect claim, you could find that the part of your policy limits you gave to the general contractor are needed to satisfy your own liability.  This could leave you with an uncovered loss beyond your ability to pay.  Based on this, you should carefully assess your bargaining power when dealing with general contractors and avoid agreeing to indemnify or name them as additional insureds whenever possible.