Product Update

Nonstandard Additional Insured Provisions Discussed in Contractual Risk Transfer

This release of Contractual Risk Transfer contains discussion of nonstandard "other insurance" clauses in additional insured endorsements.

When standard additional insured endorsements are attached to standard CGL policies, and the additional insured itself also has a standard CGL, the priority of payment between the two policies works as it should. The additional insured's primary coverage will be under the CGL providing additional insured status, and the additional insured's own CGL will function as excess insurance. But some nonstandard additional insured endorsements do not provide coverage on a primary and noncontributory basis. And some nonstandard general liability policies coordinate differently with other policies under which the named insured also has insured status. In such cases, risk transfer between the named insured and additional insured will not work as the parties intend. A case illustrating this problem—Mazo v. DCBE Contr., Inc., 2020 NY Slip Op 04371 (App. Div. 1st Dept.)—is discussed in the analysis of nonstandard additional insured provisions.