ExxonMobil hired Electrical Reliability Services as a contractor and required ERS to carry insurance naming Exxon as an additional insured. When a subcontractor's employee was injured and sued, Exxon settled for $2.5 million. Exxon demanded ERS pay the $3 million insurance deductible. The court ruled that insurance requirements and indemnity clauses are separate obligations—ERS had to pay the deductible even though the indemnity clause didn't require it. This means subcontractors can't use negligence allocation arguments to avoid paying insurance deductibles.
Insurance and indemnity clauses are treated as independent obligations. You can't use one to escape the other.
If your contract requires you to add a client as an additional insured, you're responsible for the deductible—regardless of who was actually at fault.
Review your insurance requirements carefully before signing. The deductible obligation flows directly to you, not just your insurer.