What Does Additional Insured Mean for a Contractor?
Why Do Owners and General Contractors Request Additional Insured Status?
Construction contracts often assign responsibilities between the parties. An additional insured requirement may be used to provide certain liability protection to another party for claims connected to the named insured contractor’s work, subject to the endorsement language and policy terms.
Property Owners
A property owner may require additional insured status when hiring a contractor because the contractor’s operations could create liability exposures at the project.
General Contractors
General contractors commonly require subcontractors to add them as additional insureds when subcontracted work could result in claims involving the overall project.
Contract Compliance
Additional insured requirements may be included in construction agreements, subcontracts, leases, permits, or other agreements that must be satisfied before work begins.
A Certificate and an Additional Insured Endorsement Are Not the Same Thing
Contractors are often asked for a certificate of insurance, but the certificate is generally evidence of insurance information rather than the document that grants additional insured coverage.
Shows Information About the Policy
A certificate may show the insurance company, policy dates, limits, policy numbers, and other information about existing coverage.
Changes Who Receives Certain Coverage
An additional insured endorsement modifies the policy to provide qualifying additional insured protection according to the endorsement wording.
What Should a Contractor Check?
Insurance requirements can vary considerably from one construction contract to another. Reviewing the requirements before work begins can help reduce certificate revisions and project delays.
Exact Legal Name
Obtain the correct legal name and address of the owner, general contractor, property manager, or other party requesting additional insured status.
Required Endorsement
Determine whether the contract requests a specific additional insured endorsement, wording, or coverage for ongoing and completed operations.
Liability Limits
Check whether your general liability limits meet the minimum amounts required by the contract.
Other Contract Terms
Contracts may also request primary and noncontributory wording, waiver of subrogation, completed operations coverage, or other insurance provisions.
Need Additional Insured Coverage for a Project?
Best Formula Insurance can help contractors review general liability options, additional insured requirements, liability limits, certificates, endorsements, and other insurance requirements for upcoming projects.