“A contractor is driving his van on premises to do work for a general contractor. His contract states that he must name the general contractor as an additional insured on his BAP. Please advise if this can be done by endorsement and reference the ISO form number. The current carrier advises it cannot find a form to do this.”

The ISO form is the CA 20 48 – Designated Insured endorsement, which says, “Each person or organization shown in the schedule is an ‘insured’ for Liability Coverage, but only to the extent that person or organization qualifies as an ‘insured’ under the Who Is An Insured provision contained in Section II of the Coverage Form.

In other words, this endorsement does absolutely nothing. The other party is already covered for their vicarious liability within the Who Is An Insured section of the BAP. What this endorsement does is give the other party some assurance of this level of coverage by presenting them with a piece of paper that simply references the coverage already built into the policy.

For a complete analysis of several coverage scenarios, click here.

The HO Policy and Foster Care

The VU’s “Ask an Expert” service received this question:“ What coverage, if any, does a foster child have under his or her guardian’s homeowner (HO-3)policy?”

Another recent inquiry posed a similar question with the added caveat of whether or not the foster care stipend could make this an excluded business pursuit. Unlike the HO policy, the ISO PAP specifically includes foster children within the “family member” definition:“ ‘Family member’ means a person related to you by blood, marriage or adoption who is a resident of your household. This includes a ward or foster child.”

It would make more sense if ISO’s too-primary personal lines coverage forms used the same definitions(particularly if their advisory personal umbrella policy is used), but the HO policy extends “insured” status by including the following within that definition: “Other persons unde rthe age of 21 and in the care of any person named above.” On the presumption that foster children are in the care of the named insured, this should extend “insured” status to foster children.

With regard to the business exposure, most foster care arrangements provide for covering the expenses of caring for a child, as opposed to allowing for some sort of profit. On that premise, the 2000 ISO HO forms make the following exception for the business liability exclusion: “Volunteer activities for which no money is received other than payment for expenses incurred to perform the activity.”

To read more about this issue, including a court case citation and state regulatory guidelines, click here.

Hold Harmless Agreements and the CGL

Under what circumstances would an insured agree or contract to be responsible to pay for the legal obligations for “bodily injury” and/or “property damage” of someone else? Today there are very few business contracts that do not have some type of risk transference mechanism. Construction contracts, sales contracts and leases of premises have provisions that transfer the responsibility for legal exposures from the indemnitee to the indemnitor.

The indemnitor is the party who agrees to accept the responsibility to pay and the indemnitee is the party who is relieved of the responsibility to pay. For example, in a construction contract, the builder is the indemnitor and the property owner is the indemnitee. The indemnitor agrees that if the indemnitee is sued or is found to be legally responsible for damages to a third party, the indemnitor will defend the suit and assume the responsibility to pay the damages.

To what extent does the CGL policy cover these contractual agreements? For more on this, click here.

Bill Wilson (bill.wilson@iiaba.net) is Big "I" director of the Virtual University, an online learning center for agents and brokers.