Can “Action Over” Be a Per Job Basis?

Yes, “action over” coverage can be secured on a per-job basis. This is a common practice, particularly in high-risk industries like construction.

Here’s why and how it works:

Why “Action Over” is a Per-Job Concern

An “action over” claim is a legal maneuver where an injured employee, after receiving workers’ compensation benefits from their direct employer (a subcontractor), sues a third party, such as the general contractor or property owner, for negligence. Due to an indemnification clause in the contract, the general contractor then passes the liability back to the subcontractor. This is a common and serious risk in many industries.

The nature of this risk is tied to the specific job site and contract. Each project can have different safety requirements, subcontractors, and legal agreements. Because of this, general contractors often require their subcontractors to carry “action over” coverage as a condition of the contract for that particular job.

How it Works

• Contractual Requirement: A general contractor will mandate in their contract that a subcontractor obtain a specific type of insurance coverage, often including “action over” coverage.
• Per-Project Endorsement: The subcontractor’s insurance carrier will add an endorsement to their Commercial General Liability (CGL) policy. This endorsement may be called a “per-project” or “per-job” aggregate limit. It ensures that the insurance coverage is dedicated to that specific project and won’t be eroded by claims on other jobs.
• Proof of Coverage: The subcontractor then provides the general contractor with an updated Certificate of Insurance (COI) that shows this specific, job-related coverage is in place.

In short, while a business’s core CGL policy may or may not include “action over” coverage, it is very common for a general contractor to require it on a per-job basis to protect themselves from risk.