Additional Insured Entitled To A Defense Despite Negligence Standard

In 2013, ISO introduced modifications to its standard blanket AI forms. Among several notable changes, the forms included, for the first time, a requirement that coverage for the AI would "not be broader than" the trade contract requiring AI status.

Without any case law precedent interpreting this language and little explanation from ISO, many construction industry insurance commentators, including this author, were left to speculate about the potential implications.

The basic intent is clear: to draw a closer relationship between the agreement of the contracting parties and the obligations of the AI form. However, questions were left about how narrowly or expansively that standard should be applied and what types of issues fall within the concept of "breadth."

If courts adopted a more expansive view, it would invite a new and heightened level of scrutiny of the trade contract when evaluating AI coverage obligations. Getting answers to those questions from courts, however, takes time.

Many dominoes must fall before a court has to issue a written decision, and many disputes resolve long before that opportunity arises.