General Liability & Professional Liability

[HRatCSR]

The situation:
An employer has subcontracted out a few work sites on the prime contract in the middle of a contract year. When the contract year started the Prime contractor's General Liability & Professional Liability coverage included the work sites and that sites' revenue in the total revenue for the policy.

At the time the subcontractor takes over the sites do both companies at that time need GL/PL coverage for the work sites or only one of the companies? If the later, which one?

I understand the prime contractor is always liable but if they ensure the subcontractor has sufficient coverage do they still need it or is it just a precaution? If the prime is going to still carry GL/PL coverage does the subcontractor really need it too? Double coverage for the same work sites?

Thank you in advance.

 

[Guest]

A prime contractor and a subcontractor each may be sued for their own negligent acts. Therefore, a prime contractor and the subcontractor should each have their own liability insurance.

To avoid duplicate coverage each subcontractor of a prime contractor typically will include the prime contractor as an additional insured on the subcontractor's liability insuance. The additional insured avoids the prime contractor from using their insurance for lawsuits arising out of the subcontractor's negligence.

Find out if there is written agreement between the prime contractor and the subcontractor. If so, there may be a section that pertains to insurance requirements.

 

[djs]

Not 100% sure I understand the question. I know I don't understand why the question, which would help answer this (i.e., background).

Are you saying there is (for example) 10 completely different work sites (not just projects) on the original contract, the prime subcontracted out 4 of them, in their entirety, before any work started, and wants to pull those 4 worksites off of the revenue for their insurance?

Think this through. A year after the work is completed, someone gets hurt on the property. They sue the owner of the property. The owner sues the contractor (or subrogates against) for the poor workmanship. Which contractor would they sue?

In addition, the contract says they need to have insurance.

You won't get around this easily. Not sure why you would want to.

Dan

 

[Dudley76]

The situation:
An employer has subcontracted out a few work sites on the prime contract in the middle of a contract year. When the contract year started the Prime contractor's General Liability & Professional Liability coverage included the work sites and that sites' revenue in the total revenue for the policy.

At the time the subcontractor takes over the sites do both companies at that time need GL/PL coverage for the work sites or only one of the companies? If the later, which one?

I understand the prime contractor is always liable but if they ensure the subcontractor has sufficient coverage do they still need it or is it just a precaution? If the prime is going to still carry GL/PL coverage does the subcontractor really need it too? Double coverage for the same work sites?

Thank you in advance.

But was the prime contractor's GL insurance carrier notified that they would be subbing out work? The broker that wrote this risk should have asked the insured during the underwriting process, "Do you subcontract out any work?". I'm assuming yes but if not, that will need to be endorsed onto the policy as this situation changes risk the classification codes of the policy.

Technically, the prime contractor's insurer does not have to pay a claim if a subcontractor causes a loss on a reported job site. Call your broker and add the necessary endorsement(s).

 

[xrac]

I didn't know that you could purchased General Liability for a specific job location. We always purchased GL based upon the type of work we did and the total gross company revenue. It was understood in the underwriting that we used multiple subcontractors and actually had almost no labor force of our own. The subcontractors were all asked to name our company and sometimes the owner of the project site as additional insureds.