What Is An Additional Insured And Why Do I Need To Be Listed As One?

As a business owner, you may have been asked to provide an insurance certificate with additional insured status by clients, Landlords, or other businesses you’ve worked with. 

What exactly is an additional insured?

On a general liability policy, an additional insured is a status granted to an individual or organization who is not originally named on the policy. This status is issued by the insurance company through an endorsement on the policy. The endorsement extends liability coverage on a limited basis beyond the policy holder, or named insured. This coverage includes defense costs or financial payments that you are responsible for if you are deemed liable. 

Additional insured endorsements can be added individually or through a blanket endorsement. A blanket endorsement is an endorsement that automatically extends coverage without specifically naming the additional insureds. Blanket endorsements have guidelines for when coverage is added, such as when required in a written contract, or for mortgagees, lessors and managers. Depending on what type of endorsement is used, specific terms and conditions of coverage can vary, so it’s important to read through them and understand how they change your policy. 

Contractors, landlords, governmental agencies, and venues are all examples of individuals or organizations that frequently request additional insured status from those they work with. 

For example: A contractor may require a subcontractor to list them as an additional insured on their liability policy before working with them. 

A venue may require a vendor to list them as additional insured before they are allowed on-site. 

Landlords will typically include an additional insured requirement in their lease agreements with tenants. 

In all of these cases work is being performed either for the additional insured or on a property they own.  

When should you ask to be listed as an additional insured? 

Generally, anytime someone is doing work for you or they need to come onto your property, you need to be listed as an additional insured on their insurance policies (General Liability and Workers Compensation). 

This provides your business with an added layer of protection against potential liability that may arise from the actions or operations of the person or business you're working with. 

For example: An event planner will want to make sure any vendors they contract with list them as additional insureds on their policies. Since the event planner is organizing the event and asking the vendors to be there, liability could fall on them if one of the vendors has an accident or causes a claim in any way.

By asking to be listed as an additional insured, the event planner is adding a layer of liability protection for themselves on the vendor's policy. 

Overall, being listed as an additional insured on someone’s insurance policy can provide peace of mind and financial protection in case of unexpected events or liabilities that may arise.