Allocating Risk in Commercial Contracts: Additional Insured Endorsements and Waivers of Subrogation

Additional insured coverage is commonly used by parties in commercial contracts to spread and transfer risk. Counterparties and subcontractors are often named as an AI under a liability policy in conjunction with indemnity agreements.

Understanding the relationship between contractual indemnification, insurance requirements, and AI endorsements is key to effectively allocating risk. ISO’s 2013 AI endorsement revisions need to be considered when drafting risk-transfer language.

One of the more complex issues in risk mitigation is the interplay between the insurer’s right of subrogation vs. the parties’ efforts to waive subrogation. By way of mutual waivers, each party agrees to obtain from its insurer a waiver of the insurer’s right of subrogation against the other party. Counsel must understand and critically analyze subrogation issues in contract negotiations.

Listen as our authoritative panel discusses AI endorsements and waivers of subrogation as strategies for mitigating and allocating risk in commercial contracts.

1. Additional insured coverage
   1. Additional insured vs. additional named insured
   2. Endorsements vs. certificate of insurance
   3. Policy language and various additional insured forms
   4. Scope of coverage
2. Interplay between contractual indemnity and additional insured coverage
   1. Contractual indemnification
   2. Contractual insurance requirements
   3. Additional insured coverage
   4. Crafting contractual indemnification provisions
3. Subrogation
   1. Overview of subrogation principles
   2. Mutual waivers of subrogation
   3. Limited waivers of subrogation

The panel will review these and other key issues:

• How can counsel ensure that contractually required AI coverage is satisfied by the named insured’s policy?
• How have the ISO’s 2013 revisions to AI endorsements narrowed the scope of coverage for AIs?
• How can counsel draft subrogation waivers that protect both contracting parties?