Contractual Obligations to Defend and Indemnify

CLM’s Construction Claims Community explained contractual/express indemnity and the additional insured in a recent webinar

By Eric Gilkey

12:00:00 p.m.


Keith Bremer, attorney, Bremer Whyte Brown & O’Meara LLP

Angela Clemente, director, claims technical, Allianz Resolution Management

12:02:11 p.m.

Keith Bremer
“Transferring risk has three bases. The first is implied indemnity; there is no contractual indemnity or additional insured. Two is express indemnity under the theory of a contractual indemnity. Three is additional insured, which is a contractual relationship between the insurer and insured.”

12:02:51 p.m.

Keith Bremer
“The thing to remember, whenever you get a tender of defense or you’re thinking of tendering, is to consider privity of contract. In other words, who has the right to enforce the contractual language in this setting?”  

12:12:11 p.m.

Keith Bremer
“Wait to file your cross complaint. If you’re the general contractor, you want to exhaust your efforts to tender, and then file a cross-complaint for breach of contract, express indemnity; failure to defend. That would be one declaratory relief action. Citing Crawford, we have seen complete success on that by general contractors against subcontractors.”

12:16:52 p.m.

Angela Clemente
“Tendering early and often is important because you want to avoid a situation where there is a dispute over when tender is made and the owing of pre-tender fees because those fees are not owed in most jurisdictions.”

12:18:54 p.m.

Angela Clemente
“Whether or not you decide to pursue an additional insured or contractual indemnification, something to keep in mind is that there is a distinction between an insured versus insurer obligation [and] the insurer versus insurer. In [the former], the governing legal principle is rooted in contracts. In [the latter], the governing legal principle is equity.”

12:23:34 p.m.

Keith Bremer
“The biggest thing in Crawford is a footnote that says the duty to defend is only up to that portion or exposure for your subtrade. So while you will say there is a duty to defend, don’t say anything further than that because you want to clarify how much you owe first.”

12:29:59 p.m.

Audience Question
“If you receive a certificate of insurance and it states in the note section that the company is listed as an additional insured, is that acceptable? Or is it only enforceable if you receive an additional insured endorsement?”

12:33:30 p.m.

Angela Clemente
Response to Question: “Typically, certificates of insurance are not part of the coverage. Look at the bottom of the certificate and it will say something about not guaranteeing coverage. If the additional insured is not within the coverage form itself, then typically that certificate is not going to impute coverage.”

Eric Gilkey is executive editor of CLM Magazine, a publication of the Claims and Litigation Management (CLM) Alliance. He may be reached at eric.gilkey@TheCLM.org.

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