In the world of New York construction, liability coverage can be tricky — and expensive — if you don’t understand the fine print of your insurance policy. Every contractor knows that general contractors (GCs) require subcontractors to provide certificates of insurance showing that they are named as additional insureds. But what many subcontractors don’t realize is that their liability policies may only cover the GC — and not the other parties required by the contract, such as the property owner, the bank, or its officers and assigns. This is especially true when the policy includes certain blanket additional insured endorsements that rely on strict “privity of contract.”
Blanket Endorsements Only Go So Far
When a subcontractor purchases a commercial general liability (CGL) or excess/umbrella policy through a surplus lines insurer, it’s common for the policy to include endorsements such as:
• CG 20 10 – Additional Insured – Ongoing Operations
• CG 20 37 – Additional Insured – Completed Operations
• CG 20 38 – Additional Insured – Automatic Status for Other Parties
These are blanket endorsements — which means that instead of naming each additional insured individually, they automatically provide coverage to parties with whom the named insured has a written contract requiring such coverage.
Here’s where many subcontractors get burned:
If a subcontractor signs a contract only with the GC, then only the GC may qualify as an additional insured under these endorsements. That means the property owner, bank, developer, or any other upstream party mentioned in the contract may not be covered — unless there is a separate written agreement between the subcontractor and each of those entities.
A Common Scenario
Let’s say you’re a subcontractor hired to do renovation work on a commercial building in New York City. The GC gives you a subcontract that requires you to name the GC, the property owner, the lender, and its officers and assigns as additional insureds for both ongoing and completed operations. You send your certificate of insurance over, and the GC checks the box. You think you’re all set.
Later, a post-completion claim arises — someone is injured due to alleged defects in your work. The building owner and lender are sued. They look to your insurance for defense and indemnity. You assume they’re covered.
But they’re not.
Your CG 20 37 form only extends completed operations coverage to parties with whom you have a direct written contract. And since you only signed with the GC — not the owner or lender — they are not additional insureds under your policy.
This exposes you to massive potential liability, legal headaches, and strained business relationships.
How to Fix This: Get Everyone to Sign a Simple Agreement
Before entering into a contract, it is critical that all required parties sign a simple written agreement with the subcontractor stating that the subcontractor is required to provide additional insured coverage. This ensures they are brought into privity of contract, which activates coverage under blanket endorsements like CG 20 10, CG 20 37, and CG 20 38.
Here’s a basic sample of the kind of agreement you can use:
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SIMPLE ADDITIONAL INSURED AGREEMENT
(For use with Blanket Additional Insured Endorsements)
Note: This is not legal advice. Have your attorney review this form before use.
This Agreement is made and entered into on [Date], by and between:
• Subcontractor: [Name, Address]
• General Contractor: [Name, Address]
• Property Owner: [Name, Address]
• Lender/Bank: [Name, Address]
• Other Additional Parties (if any): [Name, Address]
WHEREAS, the Subcontractor has entered into an agreement with the General Contractor to perform work at [Project Address];
WHEREAS, the General Contractor’s agreement with the Subcontractor requires the Subcontractor to provide additional insured status to the General Contractor, Property Owner, Lender/Bank, and any other designated parties for both ongoing and completed operations under its commercial general liability and umbrella policies;
NOW, THEREFORE, it is agreed that:
1. All parties named above agree that the Subcontractor is contractually obligated to provide additional insured coverage under its commercial general liability and umbrella/excess policies, including coverage for ongoing and completed operations, per policy endorsements CG 20 10, CG 20 37, and CG 20 38 (or equivalents).
2. The parties agree that this document serves as written evidence of a direct contractual relationship for insurance purposes between the Subcontractor and each party listed, sufficient to satisfy the requirements of the additional insured endorsements referenced above.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date first written above.
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Subcontractor (Authorized Signatory)
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General Contractor (Authorized Signatory)
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Property Owner (Authorized Signatory)
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Lender/Bank (Authorized Signatory)
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Other Party (if applicable)
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Don’t Skip This Step
It may seem like a formality, but this simple step can be the difference between full protection and total exposure. Too many subcontractors mistakenly assume that their policy’s blanket language will cover anyone mentioned in the contract. But without written privity, they could find themselves out of luck.
Review your policy endorsements carefully. If you’re unsure whether your CG 20 37 or CG 20 38 forms require direct contracts, ask your broker. And before starting any job, negotiate with your GC to ensure all upstream parties sign the agreement — or require the GC to facilitate those signatures.
BGES Group Can Help
At BGES Group, we specialize in contractor insurance throughout New York, New Jersey, and Connecticut. We understand the unique challenges that local contractors face — especially when it comes to complex insurance requirements buried deep in construction contracts.
Whether you’re a subcontractor worried about additional insureds, or a GC looking to protect your project and partners, we’re here to help you get the coverage you need — without the runaround.
Contact us today:
BGES Group
Gary Wallach – Contractor Insurance Specialist
📞 914-806-5853
Let’s make sure you’re covered — properly, completely, and affordably.