The insurance requirements worked in this 2018 North Carolina case, in forcing the lower tier sub’s primary general liability and umbrella insurers to pay for defense and for the amount of the settled claim. Continental Cas. Co. v. Amerisure Ins. Co.,

Typical claim arrangement.  Injury to employee of sub-sub.  Lawsuit against Sub, General and Owner.

Four tiers of parties each with several types of coverage

  • Owner / Owner controlled rolling insurance program not automatic – only for dedicated projects

  • General Contractor / Liability insurance but required lower tier to name it additional insured

  • Subcontractor / Liability and umbrella required sub sub to name it additional insured on a primary & non-contributory basis

  • Sub-Sub / Liability and Umbrella – policy had exclusion where Rolling Wrap-up applied


Injury to employee of Sub-sub who collected worker’s compensation.

Lawsuit against Subcontractor, General Contractor and Owner.

Sub’s insurer tendered the claim to the sub-sub’s carrier who denied any responsibility to defend or indemnify.

Sub’s insurer paid $600,000 to defend and $1,700,000 to the injured worker.


Exclusion in Sub-sub’s GL policy for wrap up – controlled insurance policies – did not apply where this owners wrap did not apply automatically and the project and these parties were not enrolled, not put into the program.

Additional Insured on a “primary and non-contributory” basis meant that the lower tier’s primary GL carrier paid its limits and the next payouts were the lower tier party’s umbrella policy.  “Other insurance” of another party did not come before the lower tier’s umbrella coverage even though additional insured requirement did not specifically say umbrella coverage was subject to additional insured requirement.


So much work was required to force the sub-sub’s insurer to honor the claim.