WIN Magazine - Fall 2014 - (Page 29)

fEaTuRE AN UPDATE BY cRAIg A. MAThRE, cPcU, clU, cIc, cRM, ASlI, RPlU, AU, AIc, ARM, AAM O ON AI'S, COI'S AND THE 2013 ISO g/L CHANgES NE Of ThE most common requests we see in our business is that of someone requesting to be added as an additional insured on the policy of the named insured. This usually arises out of the wording in a contract or agreement requiring such action. Whether achieving or permitting additional insured status is a good thing or not, largely depends on the perspective of the parties involved. For the person or organization requesting additional insured status, there can be certain advantages achieved in doing so, such as: * Greater safety in a risk transfer * Direct policy rights with respect to defense coverage * Ability to achieve primary and noncontributory insurance coverage * Potential for availability of higher limits of insurance * Protection from possible subrogation * Direct access to the policy coverage * Vicarious liability coverage for the named insured's actions and direct liability coverage for the additional insured's own actions But there are potential disadvantages as well, including: * Loss of control over defense * Possible "other insurance" language conflicts * Dependency upon someone else for continuity of coverage * Increased possibility of coverage disputes * Potential for limited coverage due to exclusions or restrictions There is a dangerous propensity for many to assume that when a contract or agreement call for someone to be added to the named insured's policy as an additional insured, doing so completes all of the obligations called for in the contract or agreement, and this is likely not the case. The coverage afforded to the additional insured is governed solely by the policy and endorsement wording and in no way incorporates any additional obligations called for in the contract or agreement. Company as an additional insured on a certificate of insurance does not result in XYZ Company achieving additional insured status. Only an endorsement to the policy can provide that coverage. Acord Certificates of Insurance have been modified in recent years, specifically with respect to removal of the "shall endeavor to" wording with respect to the company's obligation to provide advance notice of cancellation to a certificate holder. This wording has been removed, with the result being that the company has no obligation whatsoever to provide advance notice of cancellation to a certificate holder, absent a specific endorsement to the policy providing for the provision of notice. CERTIfICaTES Of INSuRaNCE Another potentially dangerous assumption is that coverage either displayed or requested in a certificate of insurance somehow effects change on the coverage actually contained in the policy and its endorsements. The certificate of insurance purports to evidence the coverage provided under a policy, as of a given point in time. There are several disclaims contained in standard Acord Certificates which emphasize that the certificate itself provides no coverage, and cannot be used to effect any change in coverage. All coverage is provided in the policy and any endorsements to the policy. So, naming XYZ 2013 ISO CHaNgES TO THE gl pROgRaM The 2013 ISO GL filing involved significant changes to 24 additional insured endorsements and to 34 professional services endorsements, in addition to introduction of 6 new endorsements. In addition, a significant change was made to the coverage involving liquor liability exposures. While many companies have not yet adopted these 2013 changes, it is highly likely that they will be adopted over the next 12-18 months. The changes to the additional insured endorsements are significant and represent the potential for a reduction in the breadth of W I N | F a l l 2 0 14 | 2 9

Table of Contents for the Digital Edition of WIN Magazine - Fall 2014

Cover Story: Finding Success in a Crisis of Trust
Catastrophe Bonds vs. Traditional Reinsurance: The Effect of CAT Bond Issuance on the Traditional Reinsurance Market
Contractors’ Professional Liability Exposures and Coverage
The Latest Update on Employment Background Checks
Wait…You Want to Work in the Wholesale Insurance Industry?
N Update on Additional Insureds, Certificates of Insurance, and the 2013 Iso G/L Changes
Insuring Supply Chain Risk
Innovation, Disruption, and the Sixth Force: Unintended Consequences of Regulation
In the WIN-Ner’s Circle
Index to Advertisers

WIN Magazine - Fall 2014