When drafting or reviewing commercial contracts, in-house counsel should understand the implications of different insurance-related clauses, as some contract requirements may be contentious. Even if the parties agree on terms, the insurer must also approve them for coverage to apply. Also be aware that when capping liability, you must remain “legally liable” for the coverage to apply.
Waivers of subrogation must be added to the policy by the insurer, and additional insured status is generally safer to grant than named insured status, which carries obligations and potential risks. Blanket additional insured endorsements are triggered automatically by contractual requirements so may help avoid administrative oversights. Primary and noncontributory clauses dictate which policy pays first but may meet insurer resistance, so getting agreement from the insurer and revising the policy language is key.
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