Additional Insured Coverage

Additional insured coverage is associated with general liability, property insurance,

and other insurance policies that provide additional coverage to individuals or

groups that were not initially named in the policy. Through an additional insured

coverage policy, the additional insured will be afforded protection under the policy

holder’s name.



In order to protect a business in the event of litigation claims as a result of

a hired contractors work, a business may require a contractor to add them as an

additional insured under his general liability policy. This may be a temporary situation

until the contractor has completed his projects.



On the other hand, additional insured coverage may be permanent. For instant, in

the real estate business a tenant may add a landlord as an additional insured, which

will remain with the policy until its terminated or the tenant moves. In this way,

if there is a loss or accident, like a fire or fall, then the landlord will be covered

under the tenants coverage for additional insured.



Additional insured coverage can work two ways: First, if another company adds your

business as an additional insured on their policy, then that company is providing

you with protection against their negligence. Second, you can protect another company

from your negligence by adding them as an additional insured.



For example, suppose you run a landscaping company, but you contract with Stone

Paver Services to build a retaining wall for a client. In the course of the job

— and due to Stone Paver Services negligence — a pedestrian trips over a paver

and gets hurt. The pedestrian sues both you and Stone. If Stone was added as an

additional insured on your policy, then Stone would be covered under your party

as an additional insured.



When added through an endorsement, it’s wise to obtain copies of the certificate

or endorsement to ensure there is proof of the additional insured coverage. Being

an additional insured doesn’t mean that you don’t need insurance. It simply means

that the additional insured has become involved in controlling the risk associated

with another party’s negligence.



Keep in mind, additional insured are generally not parties in the insurance contract;

their protection is narrowed through qualifying and limiting language in the policy.

Additionally, know that additional insured coverage and indemnity agreements vary

by state. It’s recommended that you work with an attorney and insurance professional

to decide if additional insured coverage is right for you, particularly if your

business involves the use of other businesses, like contractors, sub-contractors,

or independent contractors.