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Additional Insureds and State Anti-Indemnity Statutes |
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In the last few years an increasing number of states have enacted legislation aimed at limiting indemnity obligations under various contracts. The intent of these new laws is to equalize the playing field between contracting parties, where one may be dominant and seek unfair advantage of the weaker party. For example, someone may be required to sign a lease before rented property may be occupied. Few renters ever bother to read the "fine print," hence may find themselves obligated to undertake expense of loss for which he or she may not necessarily be liable, but will be forced to pay by virtue of the contractual agreements. The laws often seek mutuality in such agreements. |
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Typical of such contractual clauses are hold harmless and indemnity agreements or exculpatory clauses. These can come in a variety of formats, from very broad, where one party is required to hold another harmless and indemnify for loss even when that other party is totally liable for the loss, to limited agreements, where the contracting party is liable for loss only when he or she is legally responsible for it. Exculpatory notices are likewise suspect. When one enters a contract (including the purchase of a ticket to a sports event or the parking of an automobile) where the printed notice says that the one party "shall not be liable for loss, damage or injury" to the other, then the other party is agreeing to be liable regardless of cause. |
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It is quite common in general liability insurance for an insured to be required by a contract to name the other contracting party an "additional insured" under the policy. A number of endorsements make this possible. The additional insured thus acquires rights and duties similar to those of the Named Insured. However, the intent and impact of the agreements and the terms of the contract can often become the subject of heated litigation between that "additional insured" and the insurance company. |
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In construction liability claims the issues can become even more complicated as disputes over who is "additionally insured" under a subcontractor's or a general contractor's coverage may come into play. The new statutes often are directed at such issues, permitting indemnification only in cases where it was the clear intent of the party required to indemnify to do so regardless of the other party's negligence. Where that was not the clear intent, the new laws - which differ in each state - may supersede the policy.
The general example above illustrates the importance of your claims staff understanding the issues involved in coordinating insurance contracts with other contracts. Crawford Educational Services offers courses that help your adjusters recognize, understand and resolve these issues. For complete course listings, visit our website. |
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Contact Us Today!
404.300.1526 | |
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Upon completion of training, the entry level property or catastrophe adjuster will have been exposed to knowledge and technical skills necessary to enable them to evaluate, estimate and handle homeowners' property claims, under supervision.
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Upon completion of training, the entry level casualty adjuster will have been exposed to the knowledge and technical skills necessary to enable them to handle casualty claims while under supervision |
At Crawford Educational Services, you'll get hands-on training from our expert instructors. We offer classes in property, casualty, and workers' compensation in our classroom facility in Atlanta, as well as customized programs at your location.
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Take Note! is a marketing tool of Crawford Educational Services, the training division of Crawford & Company. The contents and any referenced external materials are not intended to and should not be construed as legal or other professional advice, nor is such information intended to be nor should it be used as a substitute for legal or professional counsel. These materials merely convey general information about claims and claims related situations often encountered by claims professionals. While an effort is made to be accurate, Crawford & Company does not represent, warrant, promise, or imply that this information is current, accurate, thorough, or adequate.
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