Why additional insured

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Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Additional insured is a type of status associated with general liability insurance policies that provides coverage to other individuals or groups that were not initially named in the policy. With an additional insured endorsement , the additional insured will then be protected under the named insurer's policy and can file a claim in the event that they are sued.

Liability insurance provides insurance for the party named in the policy for protection against insurance claims due to injury or damage to property or individuals.

Liability insurance policies provide coverage for the costs of monetary payments or payouts that the insured party might be responsible for if it's determined the insured party is legally liable. An additional insured status in a liability policy extends the coverage beyond the named insured to include other individuals or groups that were not named in the original policy.

Additional insured typically applies where the primary insured must provide coverage to additional parties for new risks that arise out of their connection to the named insured's conduct or operations. These new individuals or groups are added to the policy through an amendment called an endorsement. The amendment may name the additional insured within the policy.

However, other policies may use a blanket additional insured endorsement , which doesn't require the additional insured party to be named in the amendment. Instead, a general description of the type of groups or individuals that are to be extended coverage is added to the named insured's policy.

An additional insured amendment is helpful since it protects the individuals or parties that have been extended coverage under the named insured's policy. If a claim is filed or a lawsuit materializes, the additional insured would be covered. Resources Get your organization up to speed by taking advantage of some of our most popular resources, created especially for you. Why Additional Insured Endorsements Are So Important Additional insured endorsements are insurance provisions extending liability protection from the policyholder to other parties who may benefit.

Related Reading. Pitfalls of Additional Insured Endorsements If the named insured or the general contractor is required to extend CGL coverage to a third party, such as a hotel owner or lender, the CGL policy can be amended with an endorsement naming the third party as an additional insured. Here are four ways additional insured status could fail to protect you from liability: If the endorsement restricts coverage to ongoing operations , then an additional insured is vulnerable to liability in cases of bodily injury or property damage that occur after the contracted work is complete.

Sole negligence exclusions eliminate coverage for the additional insured if found solely responsible for the negligence that resulted in the claim. Some states have anti-indemnity laws that prohibit contracts requiring one party to assume liability for negligence committed solely by another or that obligate one party to purchase insurance covering another party's sole negligence.

Therefore, it is not uncommon for additional insured endorsements to contain a provision stating that the coverage applies only to the extent provided by law , meaning in accordance with local anti-indemnity statutes.

You may encounter a clause in an additional insured endorsement that states the additional insured will receive coverage that is no broader than the contract. In other words, if the contract states that the additional insured must be protected against bodily injury or property damage claims but includes a "no broader than the contract" provision, then the additional insured may still be held responsible for different types of claims, such as personal and advertising injury.

Ready to Get Started? Schedule Your Free Demo Today. Subscribe Now Learn from the pros about risk-mitigation, document tracking, and more, with expert articles from BCS. Share This. Watch Now. Am I Listed as an Additional Insured? What Is a Loss Payee? Read Now. Leave a Comment. Why BCS? Without including these details in the contract, the additional insured endorsement may cover only the signatory as an additional insured. They contracted with Best to manage the property.

Best issued the lease to the restaurant. However, Ready stands to lose a great deal of money should Real Good Food have a kitchen fire that causes thousands of dollars in damage to the building. Without this contractual requirement, they would not. The software is an easy-to-use, cloud-based solution developed and supported by a team of insurance professionals and is built on a foundation of insurance industry logic to automate the COI communication process and ensure you remain protected.

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