Owners And Contractors Protective Liability Overview

CG 00 09–Owners and Contractors Protective Liability Coverage Form–Coverage for Operations of Designated Contractor is unusual. The Insurance Services Office (ISO) developed it for one specific purpose. It covers the named insured's liability that arises out of operations performed on its behalf by independent contractors.

The named insured must own the property, be a tenant of the property, or be another contractor for whom the designated contractor performs operations. The liability coverage provided ends when the project is finished or operations are completed. Coverage is limited to the specific project and/or location.

The primary exposure is from vicarious liability. This is when one party is liable for another party’s negligent actions, even though the first party was not directly responsible for the injury. For example, a parent is sometimes vicariously liable for the harmful acts of a child and an employer is sometimes vicariously liable for the acts of an employee. In the OCP, it is when the named insured, either as a property owner, project owner, general contractor, or other contractor, is held liable for the acts of a hired contractor, sub-contractor, or independent contractor that works for the named insured or on its behalf. Of course, there can still be disputes regarding contractor relationships and responsibilities.

Vicarious liability is usually the result of injury or damage an employee causes under a strict employer and employee relationship. However, under certain circumstances, the liability exposure for acts by non-employees, such as independent contractors, may also be attributed to the owner or general contractor. The circumstances usually involve three situations:

• Work that is inherently dangerous
• Projects that impose non-delegable duties on the project owner under federal, state, or local laws
• The organization’s negligence because it hired incompetent contractors

The coverage is not limited to vicarious liability but also liability tied directly to the named insured because of its supervision of the contractor’s operation at the project.

ELIGIBILITY

Eligibility requires that the named insure either own the property, be a general contractor, or be another contractor that has independent contractors or sub-contractors that perform operations on its behalf. This coverage form is not written in conjunction with any other coverage form unless it has been changed by the addition of the CG 28 07–Principals Protective Liability Coverage.

POLICY MAKEUP

ISO Owners and Contractors Protective Liability Coverage consists of the following basic parts or forms:

• CG DS 02–Owners and Contractors Protective Liability Declarations
• CG 00 09–Owners and Contractors Protective Liability Coverage Form–Coverage for Operations of Designated Contractor
• Policy Cover Page or Jacket. Individual insurance companies design this form for their own purposes. It may include a table of contents or index to meet the requirements of some states.
• IL 00 21–Nuclear Energy Liability Exclusion Endorsement (Broad Form)