Insurance & LiensQuestion 683 of 1605
A subcontractor's commercial general liability (CGL) policy provides 'additional insured' status to the prime contractor for the sub's negligent work. If a third party is injured and sues both the sub and prime, under California law:
a.Additional-insured endorsements are categorically void in California construction contracts
b.The sub's insurer must defend the prime even for the prime's own active negligence
c.Effective January 1, 2013, under Civil Code §2782.05, indemnity/additional-insured obligations from a sub to a prime for the PRIME'S own active negligence in residential or commercial construction are limited or void — coverage for the prime is generally limited to the SUB's proportionate fault; the sub's insurer must still defend the prime as to claims arising out of the sub's work
d.The prime is fully covered for ALL claims regardless of fault, because the additional-insured endorsement broadens coverage
Explanation
Civil Code §2782.05 (effective 1/1/2013, with limited residential exceptions in §2782 and §2782.02) voids or limits indemnity provisions and additional-insured obligations that require a subcontractor (or its insurer) to indemnify or insure a prime/owner for the prime/owner's own active negligence. The sub remains responsible for its proportionate share of fault and must provide a defense as to claims arising out of the sub's scope. The endorsement is not categorically void, nor does it cover the prime for the prime's own active negligence. Insurance Code §11580.04 limits 'sole negligence' indemnity in any event.
Law Reference: Insurance Code §11580.04Practice all 1605 questions free — no signup required.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)