section clearly excludes JVs that are not named to the policy.
This means that no matter what option is used to insure the
JV, care should be taken to ensure this coverage continues
through any applicable statute of repose.
If the JV policy’s completed operations tail is inadequate or
the JV was insured on annual policies as in Options 1 and 2,
the members should list all completed JVs on their own policies as a named insured, or have their underwriters attach an
endorsement that provides blanket completed operations
coverage for all past JVs.
The blanket completed operations endorsement for past JVs is
the preferred approach. Be careful to maintain this coverage
when changing insurers or agents since underwriters are not
contractually required to carry this coverage over at renewal.
Some underwriters may even broaden this endorsement to
apply to all active JVs without requiring the naming of the JV
entity as an insured. This broadened endorsement provides
a contractor with true JV gap protection, but the JV entity
and the other members would not receive any benefit.
There is no industry standard endorsement for this purpose,
so be careful that: 1) the endorsement is worded to apply as
excess of any other available JV coverage that had been purchased specifically for the project and 2) it is limited to the
extent of the specific member’s liability.
Premium charges for this type of blanket coverage vary by
underwriter, with some including past JV coverage as part of
a package of coverage in an extension endorsement.
ADDITIONAL INSURED ISSUES
If the JV subcontracts any of the work to others, it should
implement the same risk-transfer techniques recommended
on non-JV projects. This should include the use of a detailed
insurance requirement in the subcontractor agreement that
requires the use of an additional insured endorsement on the
subcontractor’s CGL policy.
It’s critical that the additional insured status be extended to
the JV entity and not just to one of its members since the same
JV exclusion found in the CGL’s “Who Is An Insured” section