Condo Media - March 2020 - 28

ARE YOU SURE?

Being named Additional Insured on
someone else's policy confers certain
rights and protections you otherwise
would not be entitled to. Simply put,
when you become an Additional
Insured on another's policy you enjoy
the same insurance protections as the
original policy holder. In the context of
hiring someone to perform work and/
or provides services on your property,
in the event a loss occurs (e.g. someone
is injured or property is damaged as a
result of the work or services provided),
you may file a claim on that contractor
or vendor's policy through your status
as Additional Insured.
The typical situation where a condominium association finds itself in need
of being added as Additional Insured is
when a contractor is hired to perform
repairs or other work on common areas.
In that circumstance, the association
typically enters into a written contract
with the contractor and the work proceeds. In all cases, that contract should
at a minimum require the contractor
to carry and maintain, throughout the
life of the project, adequate commercial
general liability, property damage, automobile, and minimum statutory workers compensation insurance. A properly
negotiated contract should require that
the contractor add the association as
Additional Insured on its policies. Once
this contractual obligation is in place,
however, many associations simply ask
for a COI to confirm the association has
been listed. That COI, however, is often
not worth the paper it is printed on unless the addition as Additional Insured
is done through a written endorsement
to the policy itself.
At its basic level, a COI is a document
which evidences that someone else has
insurance, and not necessarily confirmation that another party, such as a
condominium association, has been formally added to the contractor's policy.
COI's do not generally confer coverage,
rather they are often used as tools of
the insurance industry to evidence the
existence of coverage.
In order to guarantee the association has been conferred status

CONDOMEDIA March 2020

as Additional Insured, a written
endorsement to the policy is needed
to formally modify the coverages
provided under the insurance policy.
It is critical for the association to
also review the contractor's policy to
confirm that the work it intends to
perform is covered by the policy in the
first instance. Many contractor's policies have provisions which state that
it may only add additional insureds
through formal written endorsements
to the policy (e.g. not through a COI).
Other policies may have exclusions
for condominiums, multi-family, etc.
which can create complications for an
association attempting to implicate
coverage, even if it was properly added
to the policy as Additional Insured.

Most jurisdictions have held that persons claiming to be Additional Insureds
have an affirmative obligation to review
the actual policy and not rely solely on
the COI. In practice, this is rarely done.
Oftentimes the insurance carriers never
see the COIs issued by agents and claim
to have had no knowledge that the policy
they issued was purportedly altered
to add an additional insured. With
extremely limited exceptions, courts
have generally sided with insurers when
the only evidence of Additional Insured
status is through a COI.
PRACTICAL TAKEAWAYS
FOR ASSOCIATIONS AND
PROPERTY MANGERS
The two primary insurance-related

Condo Media - March 2020

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