Understanding New York Contractors' Liability Insurance: Blanket Additional Insureds and Blanket Waiver of Subrogation

Liability insurance is essential for New York contractors, offering protection from legal claims and financial losses that may arise on a construction project. Two critical aspects of contractor liability insurance are Blanket Additional Insureds and Blanket Waiver of Subrogation. However, the coverage provided by these clauses can vary significantly depending on the wording of the policy forms. Understanding these differences is crucial to ensure the right protection is in place.

Blanket Additional Insureds: A Closer Look 

A Blanket Additional Insured endorsement allows contractors to extend their insurance coverage to other parties involved in a project, such as general contractors (GCs), property owners, or subcontractors, without naming each one individually in the policy. This simplifies the process and reduces administrative work for contractors. However, not all blanket additional insured endorsements are created equal, and the terms of coverage depend heavily on the policy wording.

Scheduled Additional Insureds: A Common Requirement 

In some insurance forms, additional insureds must be scheduled for coverage to apply. This means that simply having a contractual agreement to add someone as an additional insured isn’t enough—you must list that party explicitly on your policy. If the contractor fails to do this, the additional insured (e.g., a GC or property owner) may not be covered in the event of a claim, leaving them vulnerable to liability. 

Careful management of who is listed on the policy is crucial, especially for contractors working on multiple projects with various stakeholders. If you rely on a blanket additional insured clause but forget to schedule a party, you could face a denied claim.

Privity: What It Means for Additional Insured Coverage 

In some cases, the policy language may specify that only additional insureds where there is privity of contract are covered. Privity refers to the direct legal relationship between two parties, typically established through a contract. For example, if a subcontractor has a direct contract with a general contractor, there is privity between them, and the subcontractor’s insurance may cover the GC as an additional insured. 

However, if a property owner is not in direct contract with the subcontractor, and there is no privity, the property owner may not be covered by the subcontractor’s policy unless explicitly stated. Understanding whether your liability insurance requires privity is essential to ensure all parties that should be covered are protected.

Forms That Don’t Require Privity: Broader Coverage Options 

Not all insurance forms require privity for additional insured coverage. Some policies will provide coverage as long as the additional insured is listed in a written contract—whether that contract is between the contractor and the GC, the subcontractor, or the property owner. In these cases, privity is not necessary, which can simplify the process of ensuring coverage for all relevant parties involved in a project. 

These broader forms are typically preferred because they minimize the risk of unintentionally leaving a key stakeholder uninsured. As long as there’s a written contract specifying who should be included as an additional insured, the policy will extend coverage accordingly, even if there’s no direct contract (i.e., no privity) between the insured and the additional insured.

Blanket Waiver of Subrogation: Key Considerations 

A Blanket Waiver of Subrogation is another critical component of contractor liability insurance. When an insurance company pays a claim, they usually reserve the right to "subrogate," or seek reimbursement from another party who may be responsible for the loss. However, a waiver of subrogation prevents the insurer from pursuing legal action against other parties involved in the project, like GCs or property owners. 

But as with additional insured clauses, blanket waiver of subrogation forms can vary significantly in terms of who is covered. Some forms require the waiver to apply only to parties that are explicitly scheduled on the policy. Other forms may only extend the waiver to parties with privity of contract, meaning a direct contractual relationship must exist for the waiver to be effective. 

Finally, there are forms that provide broader coverage, extending the waiver of subrogation to all parties mentioned in a written contract, regardless of whether they are scheduled or have privity. These forms offer greater flexibility, ensuring that all necessary parties are protected from subrogation claims as long as they are included in the contract, reducing the potential for conflicts or litigation between stakeholders.

The Importance of Proper Coverage: BGES Group Can Help 

Navigating the complexities of Blanket Additional Insureds and Blanket Waiver of Subrogation can be challenging, but it’s crucial to ensure your business is fully protected. Whether your policy requires scheduling, privity, or simply a written contract, understanding the specifics of your coverage can mean the difference between a covered claim and a costly denial. 

At BGES Group, we specialize in helping New York contractors secure the right liability insurance tailored to their needs. With extensive experience in the construction industry, we can help you understand your policy’s nuances, avoid common pitfalls, and ensure that your business and its stakeholders are fully protected. 

Need help understanding your insurance coverage? Contact Gary Wallach at BGES Group today at 914-806-5853 or bgesgroup@gmail.com. Let us help you protect your business with the right insurance solutions tailored to New York contractors. 

BGES Group is one of New York, New Jersey, and Connecticut's Construction Insurance Specialists representing 50+ companies, including all the BEST general & umbrella liability programs. We offer all the coverage needed, including property, builders' risk, inland marine, general liability, umbrella liability, auto, bid & performance bonds, workers' compensation, N.Y.S. disability, and group health.  Our commitment to you goes beyond the policies we provide. We are always just a call, text, or email away, ready to assist you, even on weekends. We understand the importance of your business and are here to help you navigate any insurance challenges. 

BGES Group are Workers' Compensation Insurance Specialists for Tri-State Business Owners: Unhappy with your rates, company, being canceled, losses causing difficulty getting coverage, in the middle of an audit dispute, misclassified payrolls, or whatever your issue. We can help!  We have special programs for Auto Services, Contractors (especially in New York), Limousine Services, Logistics Companies, Manufacturers, Recyclers, and Truckers; we can help ANY tri-state business owner. We are considered "Preferred Agents" for this one program that, if we can get you into, their pricing is excellent, offers long-term coverage stability, and can cover multi-state operations. The program takes the hassle out of doing annual audits, too. 

If you want to speak with us, call Gary Wallach at 914-806-5853, click here to email, or visit our website.

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