Additional insured, primary and non-contributory, waiver of subrogation: the insurance page of your subcontract, explained

The insurance exhibit is the page of a subcontract that most trade contractors forward to their broker and never read. That's partly right: your broker should confirm your policies can meet it. But the exhibit is also a set of promises you make in the contract, and if your coverage falls short, the gap is yours to pay.

Here's what the common phrases mean.

Additional insured

The GC, and often the owner and others, want to be added to your general liability policy as additional insureds. That gives them coverage under your policy for claims caused, at least in part, by your work. Current standard endorsements also limit it to what the law allows and what your contract requires.

Two endorsements usually come up:

• Ongoing operations, often the ISO form CG 20 10, covers claims arising while you're working on site.
• Completed operations, often CG 20 37, covers claims that arise after you've finished, such as a fire traced back to your installation.

Many subcontracts require both, and require completed operations coverage to stay in place for several years after the project. Check how many years, and whether your policy will still be in force.

Primary and non-contributory

This means your policy pays first on a covered claim against the additional insured, and the GC's own policy doesn't have to share the loss. It makes your policy the one that responds, which can affect your loss history and premiums.

Waiver of subrogation

Normally, when your insurer pays a claim, it can go after whoever caused the loss to get its money back. A waiver of subrogation gives up that right against the GC and owner. Your policy usually needs an endorsement allowing it, often on general liability, auto and workers' compensation. Some carriers charge for it.

Limits

Typical requirements run around $1 million per occurrence and $2 million aggregate for general liability, with umbrella coverage on top for larger jobs. Larger or higher-risk projects often ask for more. Price the cost of any extra coverage into your bid.

A certificate isn't coverage

A certificate of insurance is a snapshot that says coverage exists. It doesn't give anyone rights under your policy. The endorsements do. GCs increasingly ask for copies of the endorsements themselves, and a certificate that says "additional insured" without the endorsement behind it won't hold up.

Questions to ask before you sign

1. Can my current policies meet every requirement, including the completed operations period?
2. Does the additional insured requirement match the indemnity clause, or ask for more?
3. Are the limits above what I carry? What will the difference cost, and is it in my price?
4. Does the subcontract let the GC withhold payment until certificates or endorsements are delivered?
5. If my policy can't do something, can we agree an exception now rather than finding out after a claim?

Send the exhibit to your broker before you sign, not after. And read it alongside the indemnity clause, because the two are designed to work together.