Additional Insured Changes May Impede Risk Allocation

Law360, New York (March 31, 2014, 5:37 PM EDT) -- In nearly every industry, contracting parties allocate risk among themselves through various techniques, such as contractual indemnities and insurance. For example, with construction and infrastructure projects, it is common for downstream participants, such as subcontractors — who do the actual work — to agree to indemnify and provide insurance to protect upstream participants, such as general contractors and owners. In turn, general contractors typically agree to indemnify and provide insurance to protect upstream owners.

A common method for a downstream player to furnish insurance protection to...
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