(800) 869-8643

admin@hayesbrokers.com

Case Study: Contractor Endorsements

Case Study: Contractor Endorsements

It all happened very quickly, but the consequences continue to affect a subcontractor. This company found out the hard way that those primary and noncontributory and waiver of subrogation endorsements aren’t as harmless as they seem. A subcontractor was working on a large remodel job with a large general contractor (GC) about five years ago doing demo work. The GC’s foreman was onsite while the sub was working on grinding down rebar and offered to help. As the foreman was finishing up the piece he was grinding, the rebar got caught on the grinder. The rebar shot out like a bullet and hit someone standing in the parking lot and cracked his skull.  Thankfully, it didn’t penetrate. In this case, the foreman who was working the grinder was not an employee of the subcontractor, he was employed by the GC.  However, the subcontractor, prior to work being performed, had provided a certificate of insurance to the GC. This certificate included primary & noncontributory and waiver of subrogation in favor of the GC as required by contract. What Happened Next The claim was settled for $150,000. Since the foreman was an employee of the GC, the injuries caused should have been the responsibility of the GC. Guess who paid? The insurance company for the subcontractor.  Why? The certificate provided included primary & noncontributory wording in favor of the GC. This puts the responsibility for the claim directly at the doorstep of the subcontractor. The sub’s insurance is primary and does not allow for the contribution of any other insurance policy, regardless of any other party’s responsibility for the accident. In...