Back cg2294 and megl0103 endorsements

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crumbaker Feb 11, 2022 10:10 AM

If company does not use insured subs, all uninsured so rated in the payroll as employees.

Why does it matter if cg2294 and megl 0103 endts are on the policy? I understand these 2 endts pertain to subs only, correct?

kris.h Feb 15, 2022 11:45 AM
The first question that I have is what do you mean by uninsured subs rated in payroll as employees? Is that for the work comp? It sounds like you're saying that they aren't insured for work comp and picked up by the GC for their work comp and if that's how they want to handle that, that's up to them.

As for the CGL endorsements, you're right. Those two endorsements are specific to subcontractors. The way you put it in your question, the insured is using uninsured subs, which is terrible risk management on their part, especially in light of these two endorsements.

CG 22 94 - removes the exception for work performed by subcontractors on your behalf from the Damage to Your Work exclusion. So if the uninsured sub does work that damages "your work", there is no coverage if a claim for BI or PD comes in related to that.

MEGL 01 03 - provides very specific requirements for providing any coverage for subcontractors and a small amount of coverage if those terms are violated.

Going back to the original question, if the insured is actually using subcontractors that don't have insurance, this protects the insurance company from paying certain claims related to the operations of the subcontractors. Since this insured has subcontractors that are uninsured, the company is limiting its liability by excluding coverage for subs related to Damage to Your Work, and by limiting coverage for ... "bodily injury" and "property damage" arising out of the "occurrence" ... involving the work performed by the contractor or subcontractor for or on behalf of the insured, to $50,000, no matter what limits the insured has.

This endorsement could create a potentially huge coverage gap for the insured since (according to how your question was put) the insured only uses uninsured subs. If the sub causes BI, PD, or P&AI arising out of the work done for the insured, the insured will only have a limited amount of coverage for that suit.
C
crumbaker Feb 15, 2022 3:40 PM
if a contractor only uses uninsured subs, I was advised they are rated as employees of the company, so the endorsement megl 0103 and cg2294 would not pertian to them, is that correct. In event of a loss?

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