What does it mean to be an additional insured?
An additional insured is a person or business added to someone else's insurance policy so they are covered by it. If a contractor names your company as an additional insured, their general liability policy can defend and pay claims that arise out of the contractor's work — shifting that risk off your own insurance.
Why it matters
When a vendor's work causes an injury or damage, you can be pulled into the claim too. Being an additional insured on the vendor's policy means their insurer steps in for you, rather than you turning to your own coverage and risking a premium increase.
How someone becomes an additional insured
It takes a policy endorsement from the vendor's insurer — it is not automatic just because a contract requires it. The certificate of insurance should reflect the endorsement, and for higher-risk work it is worth requesting the endorsement document itself.
Related terms
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