It’s a common story. A commercial contractor buys a general liability policy in order to fulfill a contract. He spends weeks shopping for the best rate and buys a policy that includes additional insured endorsements. He provides his certificate of insurance to the project manager, only to find out that his insurance is not sufficient. His contract requires a CG 20 10 (11/85) additional insured endorsement, which his policy does not offer. In the end, the contractor has to buy a new general liability policy and come up with another down payment.
So what are differences between the 11/85 and other additional insured endorsements?
The 11/85 is the original version of the CG 20 10 additional insured endorsement. It’s actually a date, November 1985. The CG 20 10 extends coverage to the contractor’s clients such as property owners, developers and general contractors. The 11/85 differs from all later versions, because it does not exclude completed operations. It covers liability arising out of “your work”.
Here is an example of the CG 20 10 (11/85):
All later versions of the CG 20 10 replace the words “your work” with “your ongoing operations”. The result is that once the project is completed, there is no longer coverage extended to the additional insured. This is especially an issue in the construction industry because most construction defect claims arise years after the projects are completed.
Here is an example of a later version of the CG 20 10:
There are many additional insured endorsements that are equivalent to the 11/85. The important thing to look for is whether or not they exclude coverage for completed operations.
Why is this important to me?
Contracts for commercial and public works projects typically require the CG 20 10 (11/85). Failure to supply the correct additional insured endorsement can hold up projects and more often, hold up payment for the work you've already completed.
If you are a contractor working for commercial buildings, schools or municipalities, you will most likely need a CG 2010 11/85 endorsement. Not all insurance carriers offer this endorsement. To avoid a major hassle, don't buy a policy without checking for the availablility of this endorsement first.