Updated: Nov 20, 2020

     An experienced Las Vegas gaming attorney with O’Reilly Law Group had a recent opportunity to  assist a client with a review and editing of a contract that required  insurance.   While contract required both parties to maintain insurance  with certain limits, it included no additional language. We found that  neither party (including the attorney representing the other party) had  any clear notion of the difference between contractually requiring  insurance and crafting an insurance clause that had actual meaning and  offered real protection. 

Breach of Contract. The clause submitted to our client required  insurance but included no other meaningful provisions beyond the stated  limits.  In the event a claim arose but the required insurance had not  been obtained, the only remedy would be one for breach of contract.   Since neither party had assets equal to the required limits of  insurance, an action for breach of contract would provide limited  prospects for recovery.

Certificate of Insurance. Requiring a Certificate of Insurance   (sometimes called an Accord Certificate) provides assurance that the  other party has obtained the contractually required insurance.  That is  all it does.  Certificates of insurance provide no rights to the  certificate holder and do not amend, extend, or alter the coverage  provided under the policy.  Certificates are issued as a matter of  information only and confer no rights to coverage. 

Additional Insured. A clause requiring a party to be named as an  additional insured provides the greatest level of protection.  One party  is the primary insured and all other parties listed on the Additional  Insured Schedule are also insured under the primary policy.   Coverage  for the additional insured will be defined by the terms of the policy  and the additional insured endorsement, with the most common forms being  ISO forms.  Professional liability policies typically do no allow (for  example) an architect’s client to be an additional insured.  Nor,  despite frequent requests from owners for additional insured status  under the architect’s policy would such coverage (even if available)  provide the protection the owner intended. 

How does your contractual insurance clause measure up?  Contact O’Reilly Law Group to learn more.