See the full video at https://youtu.be/LboD7-AL-rE
Insurers who insure contractors' liability will often include a guarantee in their policy that forces the main contractor to obtain proof that all its subcontractors are insured. In an important case, North American Capacity Insurance Co. mot Claremont Liability Insurance Co. Court of Appeal, Second District, 177 Cal.App.4th 272, no. B207878 (Cal.App. Dist. 2 08/04/2009), which dealt with a clause that is rarely processed, the California Court of Appeals enforced such an agreement and issued a warning to all general contractors who do not meet similar guarantees that they can eliminate their own coverage. In this case, the guarantee or condition required the insured to follow their general business practice in order to obtain harmless contracts and insurance certificates from their independent contractors. The insured failed to do so and tried to execute the contracts which unsuccessfully claimed that it did not have to fulfill the guarantee.
Warranty provided that coverage provided under the policy "shall not apply" to operations performed by independent contractors unless the insured:
- " has received a written agreement from each independent contractor holding it insured harmless against all debts incurred by the independent contractor "; and
- ' have received insurance certificates from each independent contractor indicating that the independent contractor will maintain similar coverage provided in this policy. … ”(emphasis in the original)
The insurance industry also uses similar guarantees that require each independent contractor to name the main contractor, owner and / or developer as additional insured.
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