A Rose by any Other Name.... But Are You Really Insured?
Do you think you have adequate insurance protection for your project under an “additional insured endorsement” to another entity’s policy? Or through a “wrap” policy, known as either an Owner’s Controlled Insurance Policy (OCIP) or Contractor’s Controlled Insurance Policy (CCIP), because you are listed as “an insured”? Perhaps not under more recent policies. Check the latest policy language carefully, and you may not like what you find. Many recent insurance policies now include limiting language that restricts the self-insured retention (SIR) provision to payments made only by “The Named Insured,” e.g., “Payments by others, including but not limited to additional insureds or insurers, do not serve to satisfy the self-insured retention. Satisfaction of the self-insured retention as a condition precedent to our liability applies regardless of insolvency or bankruptcy by you.” This past year we have noted a few published decisions that have supported such limiting policy language, allowing an insurer to restrict and ultimately refuse to accept SIR payments from any other insured but “the Named Insured.” What is the result of that interpretation if “The Named Insured” is M.I.A.? The policy is never triggered, thereby precluding coverage and the benefits of the policy to all other insureds. The potential effect on risk management and business protection for your project make those policies worthy of a second look.
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