Courts Rule On Additional Insured Endorsements And Vicarious Liability

Since the advent of the modern Insurance Services Office, Inc. (ISO), standard additional insured (AI) endorsement in the early 2000s, many insurance companies have advocated for an exceedingly narrow application, arguing that coverage is available only for the AI’s vicarious liability for the named insured’s acts or omissions.

Courts typically reject this argument in favor of a plain reading that AI coverage is available so long as the named insured played a causative role in the harm, at least in part.

A recent decision from the Eleventh Circuit Court of Appeals aligning with the narrower view -- flawed though it is -- serves as a reminder that the campaign for restrictive coverage continues and that a tailored insurance recovery strategy is critical in these minority jurisdictions.

Since the 1980s, ISO’s standard form AI endorsement covered injuries "arising out of" the named insured’s actions.

This language had been interpreted broadly in courts across the country, resulting in coverage for claims even where the AI was solely liable. In response to significant lobbying pressure from the insurance industry, in 2004, ISO modified its standard AI endorsement to include the following provision.