Additional Insured Issues - 1985 Version Equivalent

In reviewing the insurance requirements of a construction prequel statement, I saw the following question: "Will additional insured be granted on a CG 20 10 (11/85 or equivalent)". The choices are yes or no. The technically correct answer: unless you have the 1985 version (does anyone still have this), there is no such animal as equivalent.

What most are asking for is additional insured for ongoing and completed operations. Chances are you have this. The old saying, "The Devil is in the Details" comes to mind here. The trick and the problem is not in providing ongoing and completed operations coverage, but it is in the definition of the coverage trigger.

In the 1985 version, coverage is triggered by "Liability arising out of 'your work' "

The newest version (07/04) has changed the coverage trigger using the following language. "But only with respect to liability for 'bodily injury', 'property damage' or 'personal and advertising injury' caused, in whole or in part, by:

1985 was very broad in 2 ways:

• Liability - without any definition of what the liability is covered (which could include many intended excluded liabilities such as pollution, employment practices).
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• Arising out of your work. Without getting into the details of the definition of "your work", the liability only had to show that it was a casual relationship with your work. You did not have to be the cause, it just had to arise from the work you did.

2004 is very specific as to what liabilities are covered and the scope of the coverage.

The only coverages extended to the additional insured are bodily injury, property damage, and personal and advertising injury. If you have limited pollution or employment practices or professional coverage, this will NOT be extended under these endorsements.

The trigger is your acts or omissions of you or your subs. It has moved from a casual relationship to a very direct action (or lack of) in order for coverage to occur.

Okay, now that you are thoroughly bored (isn't insurance 101 fun!) You are asking: "Okay, so what does this all mean to me?"

It means that you DO NOT have the 1985 equivalent and it does not exist.

The options remain to either put down yes or not be truthful (exposing you to uninsured litigation because you said you did and didn't), or you can put down "no" and not qualify.

So how do you answer the question and still pass the prequalification?

Corporate Liability Insurance

Corporate liability insurance is a must for any company in today's world. Nowadays, people just need a reason to file a lawsuit against anyone. Corporate liability insurance protects the directors, officers and the corporate body of the company against any lawsuits which are filed against them as a company. These lawsuits can be for any reason, and the most common of these is the mismanagement of the company.

In today's complex business word, it is not possible to work in a risk free manner. The best you can do is to minimize the risks which arise due to mistake which happen while functioning of the company. The corporate must understand the type of liability coverage required for them. The owners much meet with an insurance specialist to determine the risks under which the company operate and the suitable liability insurance policy which should be bought to mitigate that risk.

Various questions should be asked while applying for such an insurance policy. These questions should include the coverage of the policy, any exclusions applicable, inclusion of workers compensation liability insurance etc. The owners should also meet with the insurance specialist on a periodic manner to make sure that the policy covers the corporate adequately. Due to dynamic nature of the business, it is possible that some additional coverage is required or some coverage may not be required anymore due to change in business.

Currently there are only a few companies which have bought corporate liability insurance company. The companies are slowly acknowledging the fact that this is one of the most important insurance policies available for smooth running of their business. They cannot afford to not buy this policy. Even if they have to cut corners in other areas to buy this policy, they should do that. This could potentially save thousands and millions of dollars which they may need to settle lawsuits and other legal fees for attorneys.

Legal Liability Insurance

Running a business in current times is not an easy task. There are a lot of people who just want to take advantage of even a small negligent behavior to file a lawsuit against the company. Legal liability insurance becomes very important for any corporate to protect the company against any such lawsuits and the monetary damages arising from these lawsuits.

While doing the day to day tasks, there are chances that your customers or employees may misinterpret your actions. Even when you have no bad intentions to harm them, they may think otherwise which lead to legal action on their part. This type of insurance guarantees that financial protection to an insured party who might be required to pay damages resulting from legally negligent conduct.

This liability can arise due to various reasons. These include personal injury to a customer or employee, damage to property or even death due to negligent behavior on part of employee of the company. When a company decides to take this type of insurance, this policy protects the company owner, directors as well as all officers who are acting on company's behalf.

There are various types of liability insurance products available. As per the need of the company, it can buy general liability insurance, bodily injury insurance, umbrella insurance, cargo legal liability insurance or garage liability insurance. The type of insurance policy will depend on the business of the company and the risks which exist in their business. These policies cover the damages as claimed by the claimant as well as legal costs which are charged by the attorney representing your case in court.

It is very important for the company to understand the need and then decide upon the type of legal liability insurance policy required for them. They should consult the insurance specialist to determine this. They should also consider revisiting the policy on a periodic basis since the business and its needs are dynamic. Therefore the insurance policy coverage may need to be changed.