Additional Insured
An additional insured is a person or entity added to an insurance policy by endorsement, gaining limited coverage rights that are narrower than those of the named insured. The additional insured is covered for liability arising from the named insured’s operations, premises, or completed work, but typically not for their own independent acts or pre-existing negligence.
When is additional insured status required?
The most common use of additional insured status is in commercial contracts. A general contractor is named as an additional insured on a subcontractor’s general liability policy so that if a third party sues the general contractor for something the subcontractor caused, the subcontractor’s policy responds. Landlords are routinely named as additional insureds on tenant policies. Mortgage lenders, equipment lessors, and franchisors request this status as a standard condition of doing business. In Georgia’s construction sector, additional insured requirements appear in nearly every subcontract, and failing to comply can put a contractor in breach before a single nail is driven.
For example, a painting subcontractor hired for a commercial job in Gwinnett County whose contract requires them to add the general contractor as an additional insured must obtain that endorsement before work begins, not after an incident occurs on site.
What is the difference between an additional insured and a named insured?
The named insured holds the broadest rights: making policy changes, filing claims, receiving any return premium on cancellation, and paying premiums. An additional insured has none of those administrative rights. Their coverage exists only in the specific capacity described in the endorsement, usually tied to the named insured’s ongoing or completed operations on a particular project or location.
What is the difference between an additional insured endorsement and a certificate of insurance?
A certificate of insurance is a document that shows coverage exists at a point in time. It does not create or modify rights under the policy. The endorsement is the actual policy language that extends coverage. Accepting a certificate without confirming a properly issued endorsement leaves a gap that surfaces only when a claim is filed.
For example, a property manager who collects a certificate from a vendor but never confirms the underlying endorsement may find that coverage is unavailable when the vendor causes a slip-and-fall injury on the property.
How much does it cost to add an additional insured?
On a commercial general liability policy, the premium increase is often a few dozen to a few hundred dollars per endorsement per term. Blanket additional insured endorsements, which automatically extend coverage to any party required by contract, can be more cost-effective for businesses with many such relationships. Some policies include blanket coverage at no added charge for certain categories of relationships.
What happens if your policy does not include the required endorsement?
If your contracts require additional insured status and your current policy does not provide it, a claim tied to that gap can be declined outright. A free coverage review with a licensed advisor at Olive Insurance Services, LLC can confirm whether your endorsements match what your contracts actually require. See also commercial insurance options available through Olive Cover.