Additional Insured on contractors' insurance?

Question

I am hiring roofers on behalf of a small condominium complex to fix several areas of the roof where some water is leaking. I obtained a copy of their insurance certificate and they have liability and workman's compensation insurance. I have gotten different opinions on whether the condominium association need to be listed as "additional insured" on the policy.

I spoke to the insurance agent on their policy who said that it is usually just done for large projects, that it would cost extra to have it done, would take time to do, and that I am free to file a claim if there are any issues.

I spoke to a real estate investor who said the association should be listed as additional insured, and the benefit is that if there were to be a claim, it would go directly through the workers' insurance and not through the condominium insurance, the downside of that being that I could have higher deductibles in the future, even though it would ultimately go through the other party's insurance.

It seems to me a bit wasteful to pay a bit more to be an additional insured when they clearly have insurance... but is this true that if there were an issue I could have a higher deductible in the future, even if the other insurance will do most of the work?

Maria Teo · Answer

Hoping I can revive this thread. Is additional insured necessary for every job or just major jobs like roofing, remodeling, foundation etc. Do you only require this of general contractors, all subcontractors or design professionals (engineers, architects, etc)? I can imagine a small business bulking at the extra paperwork if you just need them to fix a switch or change an electrical panel. Thanks

Kevin Romines · Answer

Keep in mind, the only way to get that coverage is to be an additional insured.

All contractors policies have coverage for completed products and operations. So to explain this, imagine you build kitchen cabinetry and you also install it as well. You do a job and 3 months later the cabinet falls off the wall due to your faulty installation or manufacturing processes. It hit a person on the head and they now how massive medical bills due to this. The completed products and operations coverage would pick this up.

I hope this helps?

Maria Teo · Answer

Thanks @Kenneth Cowan

My insurance agent told me when hiring a general contractor, I  should request they add me as additional insured on their policy. I guess that is the optimal way to do things, but I'm still curious to know how many people put this in to practice.

Kenneth Cowan · Answer

@Maria Teo thanks for reviving this thread. I am interested as well. Will be following.

Donald M. · Answer

Can we expand this discussion a bit? When I am hiring anyone to do work on a property (eg, plumber, electrician, roofer, and so on), should I always be listed as an additional insured? Let's say it is a single family property. And can be owner-occupied vs. a rental.

Donald M. · Answer

Is there situation when I would not want to do this? So eg, for a personal residence? Or for roofing jobs, should it always be done?

Donald M. · Answer

What is the benefit of my being added on their policy (this is for my understanding). Let's say I confirm their insurance and bonding, do not have myself added to their policy, they do the job, there is either liability to the property or a workman's compensation issue. I contact my insurance company who files a claim with the roofer's insurance company, right? Is there something else besides my being notified if they drop the coverage? The job should not take more than 1 day to perform.

Also, I called the insurance agent on their policy to confirm the insurance. Is this the right procedure or is there another way I have to confirm the insurance? I will look into the bonding and the state licensing, did not do that, thanks for this feedback!

Jacob Passmore · Answer

Agree with @Kevin R., you are hiring them, it's their responsibility to add you to their policy.  I know you mentioned you visited with their agent, but for future reference, a certificate of insurance does not mean they have current insurance. Being listed on their policy allows you to be protected as the insured, as Kevin mentioned, but also in most cases will get you notified should they stop carrying insurance. Get added to their policy, or find a roofer that will add you.. too easy.

Additional Insured on contractors' insurance?

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