Being a Named or Additional Insured Not Always Necessary for Coverage


...the “causes of loss” covered by the policy included loss or damage caused by … collapse of a building or any part of a building caused only by …weight of people or personal property.

What is interesting about this case is that while the property policy required the lessee (named insured) to sustain a loss to its business personal property to activate coverage for loss to property of others, the coverage applicable to the lessor also applied to its real property.

Searching for Coverage

When it comes to covering the property of others, what seems to be overlooked are the provisions of independently filed policies that automatically cover the interests of contractors and subcontractors in property to the extent that the named insured has assumed liability or has agreed to cover through insurance. This becomes an important issue when property owners undertake construction work and agree in their contracts to obtain property insurance covering the interest of contractors.

In these situations contractors seldom, if ever, are named as insureds and therefore are commonly overlooked after a loss. Some claims personnel simply look at the provisions of policies that address named insureds (or insureds), additional insured interests, and possibly the section on property and interests insured. The entire policy, however, should be reviewed thoroughly to see if the insurable interests of others are also covered.

To the extent that a property policy includes course-of-construction coverage, it would be prudent for claims personnel, in particular, to locate the provision that addresses new construction, additions, improvements and repairs. The reason being that if a policy provides this kind of coverage, chances are that this provision will mention the extent to which contractors’ interests are covered.

One such clause of a property policy reads as follows:


This policy also covers new buildings and structures at any location while in the course of construction and when completed; additions, extensions, alterations and repairs to buildings and structures insured hereunder including:

Considering that contractors and subcontractors commonly install and purchase materials and...