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By: Craig F. Stanovich, Principal – Austin & Stanovich Risk Managers, LLC

This 2013 endorsement broadens, in certain circumstances, the person or organization that will automatically be granted the status of an additional insured. Its purpose is to include not only those persons or organizations the downstream party has directly contracted with as an additional insured but also any other person or organization the downstream party is required to add as an additional insured by the terms of any direct agreement with an upstream party. Thus, if a subcontractor were required in the general contractor/subcontractor agreement to add the project owner as an additional insured, CG 20 38 would include the project owner even though the subcontractor has no direct contractual relationship with the project owner. But a word of caution is in order as explained below.

Construction projects typically require a “downstream” party to include as an additional insured an “upstream” party, even though the downstream party (for example, a subcontractor) has no contract with the upstream party (for example, the project owner). The subcontractor typically has a direct contract only with the general contractor—and it is in that general contractor/subcontractor agreement that the subcontractor agrees to include the project owner as an additional insured.

The ISO “Additional Insured—Owners, Lessees or Contractors—Automatic Status for Other Parties When Required in Written Construction Agreement with You” endorsement (CG 20 33) has been found in some instances to include as additional insured only those parties with which the downstream party entered a direct contract or agreement. (To read more on the limitations of blanket or automatic additional insured endorsements, see “Additional Insured—Automatic or Wet Blanket?“).

Although the purpose of the 2013 endorsement is to include not only those persons or organizations the downstream party has directly contracted with as an additional insured, a word of caution is still warranted: even with this endorsement, the named insured must be performing operations for the additional insured. For example, if the subcontractor is required to add the lender as an additional insured, the CG 20 38 would likely not be adequate as the subcontractor is performing operations for the owner and general contractor but not performing operations for the lender.

About the author and article:
Craig Stanovich is a principal at:

Austin & Stanovich Risk Managers, LLC
1174 Main Street, Suite 300
Holden, MA 01520
Phone: (888) 540–7604 ext. 102
Direct: 508-829-8844

This article first appeared on in March 2013 and is reproduced here with permission. © 2013 International Risk Management Institute, Inc. (IRMI). All rights reserved.


Copyright 2017, ConstructionRisk, LLC

This article is published in Report, Vol. 19, No. 6 (June 2017).