What Is an Additional Insured Endorsement?

It’s important to recognize that many clients don’t live and breathe commercial insurance the way we do. They may not fully understand what their policies cover or what the terminology actually means. We would like to take a moment to share some key information about a common commercial coverage: additional insured endorsements.

These coverages can be crucial when working with another business or individual on a specific project that requires a bit of extra protection. So, with that in mind, here is a brief overview of additional insured endorsements and what they do and do not cover.

What Is an Additional Insured Endorsement?

An additional insured endorsement is a policy change that extends liability coverage to another person or business for a specific relationship or activity. Typically, this comes up in contracts where one party wants protection tied to another party’s work or operations.

These endorsements are commonly requested in agreements involving landlords and tenants, property managers and vendors, project owners and contractors, general contractors and subcontractors, and vendors working with clients or venues. In each case, the goal is similar: to provide access to one party’s liability coverage if a claim arises from their work.

How Does an Additional Insured Endorsement Work?

An additional insured endorsement typically extends liability protection for claims tied to the named insured’s work, may help cover legal defense costs, and applies when both parties are pulled into the same claim due to that relationship.

For example, if a contractor’s work causes damage and the property owner is named in a lawsuit, the owner may be able to access the contractor’s policy for that claim.

What It Generally Does Not Do

This is where misunderstandings tend to happen. An additional insured endorsement does not make the added party a named insured, does not cover all claims involving that party, and does not replace the need for their own insurance. It also does not cover their independent negligence or unrelated activities, nor does it guarantee that contract requirements have been fully met.

In short, coverage is limited and tied specifically to the named insured’s work and does not provide broad, all-encompassing protection.

If you ever have questions about a contract requirement or want to review how your policy handles additional insured status, feel free to reach out. Heister Insurance is happy to help you sort through the details, 513-741-3244.