The CG endorsement added to Lee Plumbing's CGL policy names general contractor
Gencon as an additional insured. Two months after the construction project is completed, the
pipes Lee installed are unable to stand up under pressure and begin to leak, causing
substantial water damage to the nearlynew building. The building owner sues Lee for
damages, and Lee's insurer pays the claim. However, investigation shows that Lee was using
the exact materials required by Gencon's specifications. Because the CG endorsement
does not apply to completed operations, Lee's insurer can seek recovery from Gencon. Gencon
could have avoided this loss if
Gencon had used a more experienced plumber.
b Gencon provided the plumbing materials.
c the Waiver of Transfer of Rights of Recovery Against Others to Us endorsement CG had
also been added to Lee's CGL policy.
d Gencon had not been added as an additional insured under Lee's CGL policy.
