Additional insureds

Why HOAs ask for this at all

When a roofer, landscaper, or management company works on association property, the HOA usually asks to be added to that vendor's general liability policy as an additional insured, not just handed a certificate. Being added means the vendor's insurer has to defend and pay the HOA too, if a claim arising from that vendor's work names the association.

"An additional insured is a person or organization not automatically included as an insured under an insurance policy who is included or added as an insured under the policy at the request of the named insured."

Source: IRMI Glossary of Insurance and Risk Management Terms, International Risk Management Institute

HOAs typically want this for one of two reasons: to shift risk away from the association's own policy, or because the contract with the vendor requires it. The vendor's own contractors and property owners are the kind of party this status is built for.

A certificate is not the endorsement

A board that receives a certificate listing the HOA as an additional insured has not confirmed that the endorsement was actually added to the policy. A certificate only shows that a policy of a certain type existed on the day it was issued. It does not update itself if the vendor's policy later changes, lapses, or never had the endorsement attached in the first place. Ask for the actual endorsement page, not just the certificate.

Whether a written contract directly with the HOA is required for a subcontractor's policy to cover the HOA depends on which endorsement form the insurer uses. Some standard forms require that direct written contract, called privity; others extend automatically once the general contractor's own contract requires it.

The gap most boards miss: completed operations

Being named additional insured while the work is happening does not mean the HOA is covered for problems discovered after the job is finished. A roof leak found two months after the roofer left is a completed operations claim, and most standard endorsements were never written to reach it.

"All three forms only extend coverage for ongoing operations. They do not address liability arising after the work is completed, also called completed operations."

Source: Including an HOA as Additional Insured on Contractors' CGL, IA Magazine

Boards planning a roof, envelope, or paving project should ask the broker directly whether the additional insured endorsement extends to completed operations, and for how long, before assuming the project's risk ends when the crew leaves.