New ISO Forms Impact Construction Contracts

a. Revision to the Other Insurance Condition in the Main Coverage Form

In the main coverage form, CG 00 01 (occurrence-based) or CG 00 02 (claims-made), under the heading Conditions, the Other Insurance provision provides in part:

If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this Coverage Part, our obligations are limited as follows:

'

Excess Insurance

This insurance is excess over:

'

Any other primary insurance available to you covering liability for damages arising out of the premises or operations, or the products and completed operations, for which you have been added as an additional insured by attachment of an endorsement.

The new ISO forms delete the phrase “by attachment of an endorsement.” While additional insured coverage is generally provided for by way of endorsement, in rare instances a coverage form may provide additional insured coverage directly in the main policy form itself. In making the change to the Other Insurance provision, ISO clarified its intent that who qualifies as an additional insured is not contingent on whether or not the language affording additional insured status is located in the main policy form or an endorsement.

b. New Primary and Non-contributory Other Insurance Endorsement

The 2013 ISO line also includes an optional, new endorsement, CG 20 01, which modifies the definition of Other Insurance, and provides in relevant part:

Primary And Non-Contributory ' Other Insurance Condition

'

The following is added to the Other Insurance Condition and supersedes any provision to the contrary:

Primary And Noncontributory Insurance

This insurance is primary to and will not seek contribution from any other insurance available to an additional insured under your policy provided that:

(1) The additional insured is a Named Insured under such other insurance; and

(2) You have agreed in writing in a contract or agreement that this insurance would be primary and would not seek contribution from any other insurance available to the additional insured.

This new endorsement makes the coverage provided to an additional insured primary to other insurance covering that party as a named insured, provided that the policyholder has agreed to provide primary and non-contributory additional insured coverage to that party in a written contract or agreement. This endorsement does not make the insurance primary and non-contributory as to other policies where that party is an additional insured rather than a named insured.

For instance, if a subcontractor is contractually required to name the general contractor as an additional insured on its policy on a primary and non-contributory basis, this endorsement would make the coverage provided to the general contractor by the subcontractor's policy primary and non-contributory as to the general contractor's own policy, but not as to other policies (possibly issued to other subcontractors) covering the general contractor as an additional insured.

II. 'Insured Contract' Definition

Commercial general liability policies exclude coverage for contractual liability (“bodily injury” or “property damage” for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement), but the exclusion does not apply to liability for damages assumed in a contract or agreement that qualifies as an “insured contract.” “Insured contract” is typically defined to include:

That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

The definition of “insured contract” usually included in the main coverage form (CG 00 01 for occurrence-based or CG 00 02 for claims-made) has been interpreted broadly to cover liability arising out of the sole negligence of the indemnitee. However, this definition is often amended by attachment of an endorsement, CG 24 26, which provides in pertinent part:

Amendment of Insured Contract Definition

The definition of “insured contract” in the Definitions section is replaced by the following:

'

That part of any other insurance contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization, provided the “bodily injury” or “property damage” is caused, in whole or in part, by you or by those acting on your behalf. Tort liability means liability that would be imposed by law in the absence of any contract or agreement.

'

Thus, the attachment of the CG 24 26 endorsement limits coverage for the indemnitee to situations where the policyholder/indemnitor is at least partially at fault.

The revised CG 24 26 endorsement being rolled out in April amends the definition of “insured contract” to respond to anti-indemnification laws being enacted in many states. Over the past few years, a number of states have promulgated laws that prohibit or nullify provisions in construction contracts which require one party to indemnify another party for that other party's sole negligence or fault. Some states' laws even go so far as to void provisions which require one party to indemnify another party in situations where the parties are jointly negligent.

The revised CG 24 26 endorsement amends the definition of “insured contract” to add the following boldfaced language to respond to the legislative changes:

Amendment of Insured Contract Definition

The definition of “insured contract” in the Definitions section is replaced by the following:

'

That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization, provided the “bodily injury” or “property damage” is caused, in whole or in part, by you or by those acting on your behalf. However, such part of a contract or agreement shall only be considered an “insured contract” to the extent your assumption of the tort liability is permitted by law. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

Thus, under the newly revised endorsement, if the policyholder is prohibited by state law from assuming the joint negligence of another party in a construction contract, then there will similarly be no contractual liability coverage for any such assumption of liability.

III. Additional Insured Endorsements

ISO is making several substantive changes to various existing additional insured endorsements, and is also introducing a brand new blanket additional insured endorsement.

a. Language Added in Response To Anti-Indemnification Statutes

Like the revised definition of “insured contract” discussed above, the first change to the additional' insured endorsements came about in response to state anti-indemnification laws. Some states have enacted legislation governing construction contracts that not only prohibit one party from obligating itself to indemnify another party for that other party's own sole or joint negligence, but also have enacted laws prohibiting one party from insuring another party for that negligence. To be consistent with this growing legislative trend, ISO revised its additional insured endorsements to contain the following additional language:

The insurance afforded to such additional insured only applies to the extent permitted by law.

To the extent that state law prohibits the policyholder from obligating itself in a construction contract to procure additional insured coverage for another party's own sole or joint negligence, no additional insured coverage will be available under the revised endorsements.

b. Language Added Providing That Additional Insured Coverage Will Be No Broader Than Required by Contract

The revised additional insured endorsements also seek to limit the additional insured coverage provided in accordance with the obligations assumed by the policyholder in the contract. To accomplish same, ISO revised the additional insured endorsements to include the following new language:

If coverage provided to the additional insured is required by a contract or agreement, the insurance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured.

The foregoing provision essentially incorporates the specific additional insured language of the contract into the policy. In doing so, ISO's intent appears to be to limit the scope of the additional insured coverage to the lesser of either: 1) the scope of the additional insured coverage as set forth in the policy itself; or 2) the scope of the additional insured coverage as set forth in the contract. To the extent the contract requires less additional insured coverage than what the language of the additional endorsement would otherwise provide, the coverage will be limited to the lesser coverage called for by the contract.

c. Language Added Providing That Policy Limits Available to The Additional Insured Will Be No Greater Than Required by Contract

The revised additional insured endorsements also include language clearly stating that the policy limits available to the additional insured will be no greater than the limits the policyholder contractually agreed to provide. If the policyholder contracts to provide greater limits than provided for in the policy though, this of course would not increase the policy limits. To further clarify its intent, ISO is adding the following language:

With respect to the insurance afforded to these additional insureds, the following is added to Section III ' Limits Of Insurance:

If coverage provided to the additional insured is required by a contract or agreement, the most we will pay on behalf of the additional insured is the amount of insurance:

1. Required by the contract or agreement; or

2. Available under the applicable Limits of Insurance shown in the Declarations; whichever is less.

This endorsement shall not increase the applicable Limits of Insurance shown in the Declarations.

In essence, ISO is changing its additional insured endorsements such that the limits of liability available to an additional insured are the lesser of: 1) those required by contract; or 2) those set forth on the Declarations page of the policy.

d. A Brand-New Blanket Additional Insured Endorsement

ISO is also introducing a brand-new blanket additional insured endorsement, CG 20 38, entitled Additional Insured ' Owners, Lessees, or Contractors ' Automatic Status for Other Parties When Required in Written Construction Agreement.

ISO already had a similar blanket additional insured endorsement, CG 20 33, which provides in part:

Additional Insured ' Owners, Lessees or Contractors ' Automatic Status When Required in Construction Agreement with You

'

Section II ' Who Is An Insured is amended to include as an additional insured any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy. Such person or organization is an additional insured only with respect to liability for “bodily injury”, “property damage” or “personal and advertising injury”, caused in whole or in part, by:

1. Your acts or omissions; or

2. The acts or omissions of those acting on your behalf;
in the performance of your ongoing operations for the additional insured.

A person's or organization's status as an additional insured under this endorsement ends when your operations for that additional insured are completed.

Some courts have interpreted the boldfaced language of the CG 20 33 endorsement, arguably incorrectly, to require a direct contract between the policyholder and the purported additional insured. In construction contracts, however, subcontractors are often required to name other upstream parties as additional insureds (such as the owner), even though there is no direct contractual relationship between the subcontractor and those parties. The new endorsement makes clear that any party the policyholder is contractually obligated to name as an additional insured qualifies as an additional insured, regardless of whether there is a direct contract between them.

Compare the language of CG 20 33 with the new, optional CG 20 38 endorsement, which provides in pertinent part:

Additional Insured ' Owners, Lessees, or Contractors ' Automatic Status for Other Parties When Required in Written Construction Agreement

'

Section II ' Who Is An Insured is amended to include as an additional insured:

1. Any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy; and

2. Any other person or organization you are required to add as an additional insured under the contract or agreement described in Paragraph 1. above.

Such person(s) or organization(s) is an additional insured only with respect to liability for “bodily injury”, “property damage” or “personal and advertising injury” caused, in whole or in part, by:

a. Your acts or omissions; or

b. The acts or omissions of those acting on your behalf;

in the performance of your ongoing operations for the additional insured.

However, the insurance afforded to such additional insured:

a. Only applies to the extent permitted by law; and

b. Will not be broader than that which you are required by the contract or agreement to provide for such additional insured.

'

A person's or organization's status as an additional insured under this endorsement ends when your operations for that additional insured are completed.

Under the language of the new endorsement, if a subcontractor enters into a contract with the general contractor, and agrees to name the general contractor and the owner as additional insureds, both of them should be covered as additional insureds (subject to the terms and conditions), even though the subcontractor only has contracted directly with the general contractor.

IV. Professional Services Endorsements

The new ISO line is also revising various professional services endorsements to include additional language. Commercial general liability policies often exclude damages and injuries arising out of the performance of professional services from the scope of coverage by way of endorsement. A professional service is generally considered to be one requiring specialized skill or training. Typically, these liabilities are covered by separate professional liability policies. Some courts have interpreted professional services exclusions in CGL policies narrowly to exclude only liabilities arising out of the performance of the professional service itself, but not claims of negligent supervision ' even where the act being supervised would qualify as a professional service. Thus, ISO has responded by adding the following additional language to various professional services exclusions:

This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the “occurrence” which caused the “bodily injury” or “property damage”, or the offense which caused the “personal and advertising injury”, involved the rendering of or failure to render any professional service.

Under the revised language, these endorsements appear to be broad enough to exclude liability arising out of the negligent supervision of a professional service, or the negligent training or hiring of someone performing a professional service.

V. Conclusion

The ISO revisions will significantly impact coverage for contractual indemnity and additional insured obligations assumed by policyholders in contracts going forward. Many of these revisions were brought about due to the continuously evolving construction industry. Anti-indemnification statutes being enacted in various states are making it increasingly difficult for project owners and contractors to transfer risk to downstream subcontractors and their insurers.

These ISO changes, in conjunction with state laws, will likely impact the structure and language of construction contracts and insurance planning going forward. It would not be surprising to see construction companies substantially revising the language of their standard construction contracts. Carefully crafting contract language will be vital since the new and revised additional insured ISO endorsements essentially incorporate the language of the construction contract into the policy.

Heather N. Sharp is an associate and Seth A. Schmeeckle is a shareholder with Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, which has offices in New Orleans, Baton Rouge, and Houston. The views presented in this article are not necessarily the views of the firm or any of its clients.

The Insurance Services Office, Inc. (“ISO”) started introducing new commercial general liability forms and endorsements in April 2013. This is the first major revision in several years. In this new rollout, ISO makes 11 coverage form changes, including a change to the Other Insurance provision, and over 80 endorsement changes. Most of the endorsement changes consist of revisions to previously existing endorsements, but ISO is also introducing several new endorsements.

The new ISO line includes major changes to over 20 additional insured endorsements, along with the introduction of a brand new blanket additional insured endorsement. The revision additionally includes a change to the endorsement modifying the definition of “insured contract.” Over 30 professional service endorsements have undergone changes. These new forms and endorsements will significantly impact coverage for contractual indemnity and additional insured obligations assumed by policyholders in contracts, particularly in the construction industry.

I. The 'Other Insurance' Provision

a. Revision to the Other Insurance Condition in the Main Coverage Form

In the main coverage form, CG 00 01 (occurrence-based) or CG 00 02 (claims-made), under the heading Conditions, the Other Insurance provision provides in part:

If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this Coverage Part, our obligations are limited as follows:

'

Excess Insurance

This insurance is excess over:

'

Any other primary insurance available to you covering liability for damages arising out of the premises or operations, or the products and completed operations, for which you have been added as an additional insured by attachment of an endorsement.

The new ISO forms delete the phrase “by attachment of an endorsement.” While additional insured coverage is generally provided for by way of endorsement, in rare instances a coverage form may provide additional insured coverage directly in the main policy form itself. In making the change to the Other Insurance provision, ISO clarified its intent that who qualifies as an additional insured is not contingent on whether or not the language affording additional insured status is located in the main policy form or an endorsement.

b. New Primary and Non-contributory Other Insurance Endorsement

The 2013 ISO line also includes an optional, new endorsement, CG 20 01, which modifies the definition of Other Insurance, and provides in relevant part:

Primary And Non-Contributory ' Other Insurance Condition

'

The following is added to the Other Insurance Condition and supersedes any provision to the contrary:

Primary And Noncontributory Insurance

This insurance is primary to and will not seek contribution from any other insurance available to an additional insured under your policy provided that:

(1) The additional insured is a Named Insured under such other insurance; and

(2) You have agreed in writing in a contract or agreement that this insurance would be primary and would not seek contribution from any other insurance available to the additional insured.

This new endorsement makes the coverage provided to an additional insured primary to other insurance covering that party as a named insured, provided that the policyholder has agreed to provide primary and non-contributory additional insured coverage to that party in a written contract or agreement. This endorsement does not make the insurance primary and non-contributory as to other policies where that party is an additional insured rather than a named insured.

For instance, if a subcontractor is contractually required to name the general contractor as an additional insured on its policy on a primary and non-contributory basis, this endorsement would make the coverage provided to the general contractor by the subcontractor's policy primary and non-contributory as to the general contractor's own policy, but not as to other policies (possibly issued to other subcontractors) covering the general contractor as an additional insured.

II. 'Insured Contract' Definition

Commercial general liability policies exclude coverage for contractual liability (“bodily injury” or “property damage” for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement), but the exclusion does not apply to liability for damages assumed in a contract or agreement that qualifies as an “insured contract.” “Insured contract” is typically defined to include:

That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

The definition of “insured contract” usually included in the main coverage form (CG 00 01 for occurrence-based or CG 00 02 for claims-made) has been interpreted broadly to cover liability arising out of the sole negligence of the indemnitee. However, this definition is often amended by attachment of an endorsement, CG 24 26, which provides in pertinent part:

Amendment of Insured Contract Definition

The definition of “insured contract” in the Definitions section is replaced by the following:

'

That part of any other insurance contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization, provided the “bodily injury” or “property damage” is caused, in whole or in part, by you or by those acting on your behalf. Tort liability means liability that would be imposed by law in the absence of any contract or agreement.

'

Thus, the attachment of the CG 24 26 endorsement limits coverage for the indemnitee to situations where the policyholder/indemnitor is at least partially at fault.

The revised CG 24 26 endorsement being rolled out in April amends the definition of “insured contract” to respond to anti-indemnification laws being enacted in many states. Over the past few years, a number of states have promulgated laws that prohibit or nullify provisions in construction contracts which require one party to indemnify another party for that other party's sole negligence or fault. Some states' laws even go so far as to void provisions which require one party to indemnify another party in situations where the parties are jointly negligent.

The revised CG 24 26 endorsement amends the definition of “insured contract” to add the following boldfaced language to respond to the legislative changes:

Amendment of Insured Contract Definition

The definition of “insured contract” in the Definitions section is replaced by the following:

'

That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization, provided the “bodily injury” or “property damage” is caused, in whole or in part, by you or by those acting on your behalf. However, such part of a contract or agreement shall only be considered an “insured contract” to the extent your assumption of the tort liability is permitted by law. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

Thus, under the newly revised endorsement, if the policyholder is prohibited by state law from assuming the joint negligence of another party in a construction contract, then there will similarly be no contractual liability coverage for any such assumption of liability.

III. Additional Insured Endorsements

ISO is making several substantive changes to various existing additional insured endorsements, and is also introducing a brand new blanket additional insured endorsement.

a. Language Added in Response To Anti-Indemnification Statutes

Like the revised definition of “insured contract” discussed above, the first change to the additional' insured endorsements came about in response to state anti-indemnification laws. Some states have enacted legislation governing construction contracts that not only prohibit one party from obligating itself to indemnify another party for that other party's own sole or joint negligence, but also have enacted laws prohibiting one party from insuring another party for that negligence. To be consistent with this growing legislative trend, ISO revised its additional insured endorsements to contain the following additional language:

The insurance afforded to such additional insured only applies to the extent permitted by law.

To the extent that state law prohibits the policyholder from obligating itself in a construction contract to procure additional insured coverage for another party's own sole or joint negligence, no additional insured coverage will be available under the revised endorsements.

b. Language Added Providing That Additional Insured Coverage Will Be No Broader Than Required by Contract

The revised additional insured endorsements also seek to limit the additional insured coverage provided in accordance with the obligations assumed by the policyholder in the contract. To accomplish same, ISO revised the additional insured endorsements to include the following new language:

If coverage provided to the additional insured is required by a contract or agreement, the insurance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured.

The foregoing provision essentially incorporates the specific additional insured language of the contract into the policy. In doing so, ISO's intent appears to be to limit the scope of the additional insured coverage to the lesser of either: 1) the scope of the additional insured coverage as set forth in the policy itself; or 2) the scope of the additional insured coverage as set forth in the contract. To the extent the contract requires less additional insured coverage than what the language of the additional endorsement would otherwise provide, the coverage will be limited to the lesser coverage called for by the contract.

c. Language Added Providing That Policy Limits Available to The Additional Insured Will Be No Greater Than Required by Contract

The revised additional insured endorsements also include language clearly stating that the policy limits available to the additional insured will be no greater than the limits the policyholder contractually agreed to provide. If the policyholder contracts to provide greater limits than provided for in the policy though, this of course would not increase the policy limits. To further clarify its intent, ISO is adding the following language:

With respect to the insurance afforded to these additional insureds, the following is added to Section III ' Limits Of Insurance:

If coverage provided to the additional insured is required by a contract or agreement, the most we will pay on behalf of the additional insured is the amount of insurance:

1. Required by the contract or agreement; or

2. Available under the applicable Limits of Insurance shown in the Declarations; whichever is less.

This endorsement shall not increase the applicable Limits of Insurance shown in the Declarations.

In essence, ISO is changing its additional insured endorsements such that the limits of liability available to an additional insured are the lesser of: 1) those required by contract; or 2) those set forth on the Declarations page of the policy.

d. A Brand-New Blanket Additional Insured Endorsement

ISO is also introducing a brand-new blanket additional insured endorsement, CG 20 38, entitled Additional Insured ' Owners, Lessees, or Contractors ' Automatic Status for Other Parties When Required in Written Construction Agreement.

ISO already had a similar blanket additional insured endorsement, CG 20 33, which provides in part:

Additional Insured ' Owners, Lessees or Contractors ' Automatic Status When Required in Construction Agreement with You

'

Section II ' Who Is An Insured is amended to include as an additional insured any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy. Such person or organization is an additional insured only with respect to liability for “bodily injury”, “property damage” or “personal and advertising injury”, caused in whole or in part, by:

1. Your acts or omissions; or

2. The acts or omissions of those acting on your behalf;
in the performance of your ongoing operations for the additional insured.

A person's or organization's status as an additional insured under this endorsement ends when your operations for that additional insured are completed.

Some courts have interpreted the boldfaced language of the CG 20 33 endorsement, arguably incorrectly, to require a direct contract between the policyholder and the purported additional insured. In construction contracts, however, subcontractors are often required to name other upstream parties as additional insureds (such as the owner), even though there is no direct contractual relationship between the subcontractor and those parties. The new endorsement makes clear that any party the policyholder is contractually obligated to name as an additional insured qualifies as an additional insured, regardless of whether there is a direct contract between them.

Compare the language of CG 20 33 with the new, optional CG 20 38 endorsement, which provides in pertinent part:

Additional Insured ' Owners, Lessees, or Contractors ' Automatic Status for Other Parties When Required in Written Construction Agreement

'

Section II ' Who Is An Insured is amended to include as an additional insured:

1. Any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy; and

2. Any other person or organization you are required to add as an additional insured under the contract or agreement described in Paragraph 1. above.

Such person(s) or organization(s) is an additional insured only with respect to liability for “bodily injury”, “property damage” or “personal and advertising injury” caused, in whole or in part, by:

a. Your acts or omissions; or

b. The acts or omissions of those acting on your behalf;

in the performance of your ongoing operations for the additional insured.

However, the insurance afforded to such additional insured:

a. Only applies to the extent permitted by law; and

b. Will not be broader than that which you are required by the contract or agreement to provide for such additional insured.

'

A person's or organization's status as an additional insured under this endorsement ends when your operations for that additional insured are completed.

Under the language of the new endorsement, if a subcontractor enters into a contract with the general contractor, and agrees to name the general contractor and the owner as additional insureds, both of them should be covered as additional insureds (subject to the terms and conditions), even though the subcontractor only has contracted directly with the general contractor.

IV. Professional Services Endorsements

The new ISO line is also revising various professional services endorsements to include additional language. Commercial general liability policies often exclude damages and injuries arising out of the performance of professional services from the scope of coverage by way of endorsement. A professional service is generally considered to be one requiring specialized skill or training. Typically, these liabilities are covered by separate professional liability policies. Some courts have interpreted professional services exclusions in CGL policies narrowly to exclude only liabilities arising out of the performance of the professional service itself, but not claims of negligent supervision ' even where the act being supervised would qualify as a professional service. Thus, ISO has responded by adding the following additional language to various professional services exclusions:

This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the “occurrence” which caused the “bodily injury” or “property damage”, or the offense which caused the “personal and advertising injury”, involved the rendering of or failure to render any professional service.

Under the revised language, these endorsements appear to be broad enough to exclude liability arising out of the negligent supervision of a professional service, or the negligent training or hiring of someone performing a professional service.

V. Conclusion

The ISO revisions will significantly impact coverage for contractual indemnity and additional insured obligations assumed by policyholders in contracts going forward. Many of these revisions were brought about due to the continuously evolving construction industry. Anti-indemnification statutes being enacted in various states are making it increasingly difficult for project owners and contractors to transfer risk to downstream subcontractors and their insurers.

These ISO changes, in conjunction with state laws, will likely impact the structure and language of construction contracts and insurance planning going forward. It would not be surprising to see construction companies substantially revising the language of their standard construction contracts. Carefully crafting contract language will be vital since the new and revised additional insured ISO endorsements essentially incorporate the language of the construction contract into the policy.

Heather N. Sharp is an associate and Seth A. Schmeeckle is a shareholder with Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, which has offices in New Orleans, Baton Rouge, and Houston. The views presented in this article are not necessarily the views of the firm or any of its clients.