BROCHURE: UNDERSTANDING THE OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE FORM

(November 2022)

Did you know that you are responsible for safety at a jobsite when you hire someone to work on your construction project? You probably know that you can transfer that obligation to the contractor and require that it name you as an additional insured on its policy. However, what happens if the contractor's coverage lapses or is cancelled or its limits are used up by paying other claims? The best way to protect yourself may be an Owners and Contractors Protective Liability Coverage Form that is 100% in your control.

Consult the policy for definitions and limitations. The terms of this brochure do not represent contract terms. The policy is subject to company underwriting practices.

WHAT IS COVERED

The Owners and Contractors Protective Liability Coverage Form–Coverage for Operations of Designated Contractor is unusual. It was developed for one specific purpose. It protects you for your liability that arises out of operations that independent contractors perform for you. It applies only when the liability is imposed on you because of either the contractor's actions or your general supervision of the contractor. Coverage is limited to the specific project, location, and contractor and ends when the project is finished or operations are completed.

This coverage form allows you to shift the burden of paying for coverage to the contractor. You are the named insured and control its cancellation. The coverage form’s limits are for your protection only.

The Owners and Contractors Protective Liability Coverage Form protects your assets for damages due to bodily injury and property damage legal obligations that arise from an occurrence at the designated project or location caused by the designated contractor or also for your acts or omissions in supervising the contractor. Lawsuits and their related costs are covered, except for punitive damages in some cases. Limits should be sufficient to handle serious injuries and a victim’s potential loss of earnings.

WHAT IS NOT COVERED

Every insurance coverage form or policy has certain exclusions and limitations. This is because the coverages are either needed by only specific types of businesses or the risk or exposure to loss is not considered insurable for one or more reasons. Some of the exclusions are:

• Expected or Intended Injury
• Contractual Liability
• Work Completed or Put to Intended Use
• Acts or Omissions by You and Your Employees
• Workers Compensation and Similar Laws
• Employers Liability
• Damage to Property
• War
• Mobile Equipment used in racing activities
• Pollution
• Damage to Impaired Property or Property Not Physically Injured
• Electronic Data

Always review the coverage form carefully for other limitations and details of the exclusions.

CONDITIONS

Conditions are obligations you owe the insurance company as well as obligations the insurance company owes you when a loss occurs. Some of the common conditions are:

• Bankruptcy
• Your Duties in the Event of Occurrence, Claim, or Suit
• Other Insurance
• Premium Audit
• Separation of Insureds
• Transfer of Rights of Recovery Against Others to Us
• Cancellation
• When We Do Not Renew

DEFINITIONS

Refer to the coverage form for a list and description of definitions.

ENDORSEMENTS

This coverage form provides fairly narrow coverage but there are a few endorsements available to modify or adjust it.

Note to subscribers:

Related Article: Owners and Contractors Protective Liability Coverage Form Endorsements Checklist

REPRINT PERMISSION

PF&M subscribers in any manual or electronic form are permitted to reprint any portion of this brochure for their commercial insurance customers. Other uses require permission from The Rough Notes Company, Inc.