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I learned something interesting today so I am going to share it with you guys. Contractors depend on being protected for subcontractors workplace accidents by requiring that the sub includes the Contractor as as additionally insured.
If a sub's employee gets injured on the job in most places the Workmens Compensation Laws preclude the employee from suing their employer.
Here is the kicker, for endorsements after 2004 the insurance industry changed the additional insured endorsements to exclude coverage where the contractor's negligence is alleged but no claim is made against the sub.
So in order for you to be protected, just being named additionally insured may not be good enough. You have to get the sub to eliminate the exclusion. If they are unable or unwilling to do that then you have to include an indemnification clause in your contract.
I have a copy of the clause if you are interested.
I think it's just a matter of going the extra step. Some people are just happy to get the certificate and never look at the underlying coverage.
I know of one contractor that lost his liablity insurance but it didn't stop him. He just scanned his old accord form and printed it out on a laser printer when he had to submit an insurance certificate. None of his clients ever checked. He got away with that for a year or so.
Subcontractor agrees to indemnify and hold harmlessthe Contractor for,from and against any liabilities, claims, penalties,fines , forfeitures, lawsuits and the costs and expenses incident thereto (including costs of defense and attorneys fees), which the Contractor hereafter may incur or pay as a result of a death or bodily injury to any person, or any destruction or damage to anything arising out of the demolition site or Subcontractor's operation under this Contract EVEN IF THE CONTRACTOR IS NEGLIGENT IN WHOLE OR PART.
(The last part has to be capitalized in most states in order for it to be enforceable)
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