What Is an Additional Insured?
What Does Additional Insured Mean?
An additional insured is a person or organization that is granted certain insured status under another party’s liability policy through an endorsement or qualifying policy provision.
It Is Usually Contract-Driven
A lease, service agreement, vendor contract, construction agreement, or customer contract may require one party to provide additional-insured status to another.
It Is Not the Same as the Named Insured
The business purchasing the policy generally remains the named insured. An additional insured receives more limited protection based on the endorsement and relationship to the named insured’s work or operations.
Coverage Is Not Unlimited
Additional-insured protection may apply only to certain liability arising from the named insured’s operations, work, premises, or other relationship described by the endorsement.
Why Do Other Organizations Ask to Be Added?
Another organization may want protection if it could be named in a lawsuit because of your business operations, work, use of premises, products, or contractual relationship.
A commercial landlord may require additional-insured status for certain liability connected to the tenant’s occupancy or business operations.
A customer may require additional-insured protection before allowing your business to perform work, provide services, or operate at its location.
Vendor agreements, distribution relationships, events, and other business arrangements may include additional-insured requirements.
Owners may want protection when your operations on their property could create liability allegations involving both parties.
What Should a Business Review Before Adding Another Organization?
Additional-insured requests should be compared with the contract, policy endorsements, and actual business relationship so the insurance documentation reflects what is required and available.
Confirm the full legal name and any address or project information needed to correctly identify the additional insured.
Review the agreement for the required additional-insured status, limits, ongoing or completed operations language, and other insurance conditions.
Different endorsements may provide different scopes of protection. The endorsement used should match the relationship and applicable contract requirement.
Contracts may also request primary and noncontributory wording, waiver of subrogation, specific liability limits, or other insurance provisions that should be reviewed separately.
Does Your General Liability Policy Match Your Additional-Insured Requirements?
Best Formula Insurance can help businesses review General Liability coverage, additional-insured requests, certificates of insurance, contract requirements, liability limits, and related endorsements.