ARE YOU AN ADDITIONAL INSURED – MAYBE OR MAYBE NOT?

Condominium associations, developers, and contractors will typically want to be named as an additional insured on casualty insurance policies of their respective contractors and subcontractors performing work on a construction project. One of the main advantages of being an additional insured is the existence of insurance to potentially cover certain casualty losses that may arise from the construction process.

But, how does one truly know if they are an additional insured? Ideally, the insurance policy should have an endorsement that specifies who is an additional insured and that insured’s coverage. In this context, the policy should be examined to verify the nature and extent of coverage, including the policy period(s), any qualifications, limitations or other conditions that may affect an additional insured’s status and available coverage.

At times, an additional insured will receive what is commonly referred to as an Acord Certificate of Insurance. This document generally summarizes a policyholder’s insurance coverage and is typically provided to demonstrate compliance with insurance requirements of a construction contract. .When issued by the insurer or its authorized representative, the certificate of insurance is evidence of “additional insured” status. . International Ship Repair & Marine Services, Inc. v. Northern Assurance Company of America, 2011 WL 5877505 at *6 (M.D. Fla. 2011). The certificate may, however, contain certain disclaimers, which should be examined and evaluated with the actual policy. Official Cargo Transport Co., Inc. v. Underwriters at Lloyd’s of London, 143 Fed.Appx. 173, n. 1 (11^th Cir. 2005) (certificate of insurance did not in any way evidence that insurer had agreed to the addition of company as a named insured. The certificate actually stated that it “does not amend, extend or alter the coverage afforded by the policies.”)

What happens when the insurer decides not to renew the policy? Does that also cancel one’s status as an additional insured? Recently, in North Pointe Cas. Ins. Co. v. Arden Ins. Associates, Inc., 2011 WL 5964364 at *1 (Fla. 4^th DCA 2011) an insurer failed to give its named insured subcontractor written notice pursuant to Fla. Stat. § 627.4133 of the insurer’s nonrenewal of a policy that also provided coverage for the subcontractor’s additional insured. Finding the policy to still be in effect, the court also found that coverage existed for the additional insured. Under such circumstances, an insurer, insured, and additional insured should evaluate whether notice of non-renewal of an insurance policy was properly given.

An additional insured should be mindful of the foregoing in evaluating its available insurance coverage.