Transcription
DEMYSTIFYING THECERTIFICATE OF INSURANCENorm Hamill, OGCCynthia Low, Risk ServicesMay 13, 2013
RISK TRANSFER IndemnityIndemnity is a contract by which one engages tosave another from a legal consequence of theconduct of one of the parties, or of some otherperson. (Civil Code §2772.) InsuranceInsurance is a contract whereby one undertakes toindemnify another against loss, damage, orliability arising from a contingent or unknownevent. (Insurance Code §22.)2
RISK TRANSFER AT A GLANCEINDEMNIFICATIONSELF-INSURANCE ANDCOMMERCIAL INSURANCEUC CONSTRUCTIONSERVICESINSURANCECOMPANYCONTRACTOR 3
TRADITIONAL INSURANCE PROGRAM Multiple insurersLimits shared with allprojectsDifferent terms andconditions of coverageUninsured contractorsCross litigationamongst contractorsWCGL/XSWCGeneral Contractor/Construction ManagerGL/XSGL/XSWCUniversity ofCaliforniaPrimeWCWC – Workers’ CompensationGL/XSGL/XSPrimePrimeGL – General LiabilityWCGL/XSPrimeWCXS – Excess General Liability4
5
COIS – PURPOSE Demonstrates that the insured maintains therequired insurance. COI identifies: Types of policies, e.g. General Liability, Auto Liability,Workers’ Compensation, Professional Liability Policy periods Policy limits COI is a snapshot in time. Policies can be cancelled. Need new COI if contract work continues beyondpolicy expiration stated on the COI.6
COIS – PROOF OF INSURANCE PURPORTS to demonstrate that the certificateholder is an additional insured In California – COI proof that the holder is anadditional insured. Insurance Code section 384:“This certificate or verification of insurance is not aninsurance policy and does not amend, extend oralter the coverage afforded by the policies listedherein. [T]he insurance afforded by the policiesdescribed herein is subject to all the terms,exclusions and conditions of the policies.”7
COIS – ADDITIONAL INSURED (AI) UC is an additional insured only if the policy isamended to name UC as an additional insured. Scheduled Endorsement – specifically names UCas an additional insured, usually for a specificproject. Blanket Endorsement – if the contractor/namedinsured is required by contract to name anotherparty as an AI, then the other partyautomatically qualifies as an AI.8
9
10
11
COI SPECIAL PROVISIONS Additional Insured Requires that UC be named as an AdditionalInsured on the GL policy UC identifies the specific endorsements that mustbe part of the policy. Carriers issue different endorsements with differentcoverages. CG type of form; 2010 form number; (10/01) edition date UC requests broad AI coverage.12
COI SPECIAL PROVISIONS Severability of Interest GL Coverage must contain severability of interestprovision. The insurance applies to the named and additionalinsureds as though a separate policy were issued toeach. This allows the policy to cover a claim made by oneinsured against the other. The exclusions referring to “the insured” only applyto the insured seeking coverage and not to anyinsured. The named and additional insureds still share thepolicy limits; the severability of interests does notincrease the available policy limits.13
COI SPECIAL PROVISIONS Primary and Non-Contributory GL Coverage must contain primary and noncontributory provision. The contractor’s insurance which names UC as an AIis primary and responds first to the loss. UC’s self-insurance and commercial insurance arenot required to respond to the loss until the primarycoverage is exhausted. Expression of intent between UC and the contractor Language of insurance policies agree to follow anexpression of this intent14
COI SPECIAL PROVISIONS Professional Liability The Professional Liability policy must contain contractualliability coverage for liability that would exist in absence ofthe contract. If professional services are not being provided under thecontract, then professional liability coverage is not required. Contractual liability coverage is coverage that pays for theCM’s/Architect’s indemnification obligation. Covers tort liability assumed by the named insured; If the damages are otherwise covered by the policy, i.e. theprofessional negligence causes damage to the work of othercontractors; and The contract must be an “insured contract” – most contractsare “insured contracts”.15
16
17
18
required insurance. COI identifies: Types of policies, e.g. General Liability, Auto Liability, Workers' Compensation, Professional Liability Policy periods Policy limits COI is a snapshot in time. Policies can be cancelled. Need new COI if contract work continues beyond policy expiration stated on the COI.
