1. Liability Issues to Worry About – Indemnity Agreements and Additional Insureds E. Stuart Powell, Jr. CPCU CIC CLU ARM ChFC AMIM AAI ARe CRIS Vice President of Insurance Operations & Technical Affairs Independent Insurance Agents of North Carolina

2. Indemnity Agreements Definition – “A contractual or equitable right under which the entire loss is shifted from a tortfeasor who is only technically or passively at fault to another who is primarily or actively responsible.” – Black’s Law Dictionary

3. Indemnity Agreements Indemnitor Indemnitee

4. Indemnity Agreements Types of Agreements – Three Categories – Limited Negligence of indemnitor – Broad Negligence of indemnitor Joint negligence of indemnitor and indemnitee Sole Negligence of Indemnitee – Intermediate Negligence of indemnitor Joint negligence of indemnitor and indemnitee

5. Indemnity Agreements Limitations on Indemnifications – Exculpatory Clauses – common law – Anti-Indemnity Statutes – NC General Statute § 22B-1

6. Indemnity Agreements Example of an Indemnity Provision – AIA A201

7. Contractual Liability The CGL Contractual Liability Exclusion – Breach of Contract vs. Contractual Indemnification – Absolute contractual exclusion – Coverage granted by exception to exclusion Liability in absence of a contract “Insured Contracts”

8. Contractual Liability “Insured Contracts” – Covers B.I. and P.D. assumed in the contract – Includes legal fees incurred by the indemnitee if those fees are also assumed in the contract. Definition of “Insured Contracts” – One party assumes the tort liability of another to pay B.I. or P.D. to a third party

9. Contractual Liability CG 21 39 – Contractual Liability Limitation – Restores contractual liability to pre-simplified wording – Removes paragraph f. from “insured contract” definition CG 24 26 – Amendment of Insured Contract Definition

10. Contractual Liability Indemnity Agreement vs. CGL Contractual Coverage – Breadth of the indemnity agreement – Breadth of the contractual liability coverage – Contractual liability disclaimer

11. Additional Insureds Types of Insureds – Named Insureds – Insureds by Definition – Additional Insureds

12. Additional Insureds ISO CGL Additional Insured Endorsements – More than 30 endorsements – Reasons for multiple endorsements

13. Additional Insured Endorsements CG 20 10 (07 04) – Additional Insured – Owners, Lessees or Contractors – Scheduled Person or Organization CG 20 33 (07 04) – Additional Insured – Owners, Lessees or Contractors – Automatic Status When Required In Construction Agreement With You CG 20 37 (07 04) – Additional Insured – Owners, Lessees or Contractors – Completed Operations

14. Types of Insureds Named Insureds – Broadest benefits under policy Insureds by Definition – Basic benefits under policy Additional Insureds – Benefits specified by endorsement