Contract Risk Academy Blog

Best Practices for Additional Insured Coverage under Umbrella/Excess Liability Policies

additional insured contract review contract risk management insurance umbrella / excess liability Jul 25, 2023

By Noelle McCall, CIC, CRM, CISR

High Court Rules Exxon Owed Additional Insured Coverage under Umbrella Policies (

The article in the link above confirms why it is a best practice to require the following in your contracts with downstream parties:

  • Commercial general liability and umbrella/excess coverage
  • additional insured (AI) coverage on downstream party’s commercial general liability and all umbrella/excess liability policies
  • AI coverage to apply on a primary and non-contributory basis with respect to additional insured’s insurance, deductibles, self-insured retentions, amounts excess of insurance, and self-insurance
  • to the extent allowed by law, require downstream party, its subcontractors of every tier, and each of their respective insurance carriers to waive their respective subrogation rights in favor of additional insureds and indemnitees  
  • minimum limits (and preferably also require the greater of limits required by law, policy limits, or limits required by contract)
  • require copies of and review all additional insured, primary & non-contributory, and waiver of subrogation endorsements for compliance with contract requirements
    • require new or revised endorsements if current endorsements do not provide the full scope of required coverage

By following these best practices, businesses can reduce contractual risk, avoid unnecessary and costly litigation, and help avoid the potential risk of uninsured losses. 


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