A client requests that you provide additional general liability coverage specifically naming them as additional insured. This request is:
Correct Answer
B) Standard practice and easily accommodated
Adding clients as additional insured on general liability policies is standard practice in construction contracts. It provides them with coverage under your policy for claims arising from your work and is easily accomplished through an endorsement.
Why This Is the Correct Answer
Adding clients as additional insured on general liability policies is indeed standard practice in the construction industry. This arrangement protects the client from liability claims that may arise from the contractor's work on their project. It's easily accomplished through a simple endorsement to the existing policy and is commonly requested in construction contracts. This practice helps ensure that both parties have appropriate coverage and reduces the client's exposure to potential lawsuits stemming from the contractor's operations.
Why the Other Options Are Wrong
Option A: Unreasonable and should be rejected
This is incorrect because requesting additional insured status is not unreasonable at all - it's actually a very common and standard request in construction contracts that contractors should expect and be prepared to accommodate.
Option C: Only required for public projects
This is incorrect because additional insured requests are common in both private and public projects. While public projects may have specific insurance requirements, the practice of naming clients as additional insured extends across all types of construction projects.
Option D: Unnecessary if you have umbrella coverage
This is incorrect because umbrella coverage and additional insured status serve different purposes. Umbrella coverage provides higher limits of coverage, but it doesn't automatically extend the contractor's primary liability coverage to protect the client as an additional insured would.
Memory Technique
Think 'AI = Always Include' - clients Almost always want to be Additional Insured, and contractors should Always Include this as a standard accommodation
Reference Hint
Look up insurance requirements and general liability coverage in the business and law sections of your contractor reference manual
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