An additional insured is:
Before we answer this, let back up to what a certificate of insurance is. A certificate of insurance form indicates the types of insurance policies written, policy dates, and coverage limits. It is a very basic snapshot of your insurance. The additional insured endorsement must be added to the insurance policy unless the policy automatically gives it. The certificate reflects this status. Most companies charge about $40-70 per year for each additional insured on the policy. While others may include it in their base policy if required by written contract.
An “additional insured” is a person or business added to an insurance policy for coverage. This may be a temporary arrangement (contractor on a job adding the project’s premises until complete) or more permanent (if the contractor ongoing jobs with the company). It amends the “Who is a Named Insured” section of the policy.
There are many different types of additional insured endorsements. Here, the words “primary and non-contributory” and “must include completed operations coverage” daily. Adding these extra’s may cost an additional $100 or more per year for each request. We highly recommend that you send us “any” insurance requirements before taking the job. They should really be reviewed to avoid any surprises, and so you can factor in any additional costs.
Reasons to add or want to be added as additional insured:
1) Close relationship with the additional insured
2) Business relationship with the additional insured, and, typically, a contractual agreement to add
3) Act’s as a safety net if the hold harmless agreement is unenforceable
4) Secure direct policy rights with respects to defense costs
5) Prohibit subrogation action
6) Provide vicarious liability for the named insured’s actions and/or direct liability for additional insured’s actions
Obtain personal and advertising injury coverage
Problems for the named insured by adding additional insureds:
1) Dilution of policy limits – The sharing of limits
2) Exhaustion of limits
3) Unintended coverage provided
4) Defense conflicts
5)Compliance problems
Problems for the additional insured:
1) Loss of defense control
2) Increased probability of disputes over coverage
3) Other insurance conflicts – equal shares versus primary and non-contributary
4) Coverage provided and type of coverage depends on the edition date of the policy endorsement
We hope you found this information helpful. We have affordable contractor insurance. Call us at 952-222-8073 or request an online quote today!