An additional insured endorsement changes an insurance policy to expand coverage to a person or organization that isn’t named in the original policy. You may need to add other parties to your business insurance policy if you lease space or work as a subcontractor.
To break the term down further, an “additional insured” is a party who's added to an insurance policy so that they can be protected alongside the policyholder.
An “endorsement” is a modification to an insurance policy. Endorsements are also called riders.
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When should you add an additional insured endorsement?
The most common reason to add an additional insured to your policy is because someone — a landlord or a general contractor, for instance — asks you to.
If you lease space, your landlord may require you to purchase business property insurance and add them as an additional insured. If you’re a subcontractor on a construction site, your general contractor may ask to be added to your general liability insurance policy as an additional insured.
Take your landlord, for example. You add that company as an additional insured on your general liability policy. A patron later files a slip-and-fall lawsuit, naming both you and the company that owns your building.
Your policy will pay out in response to the claim. Because you added your landlord as an additional insured, your policy covers both of you. They will benefit from your insurance coverage. They won't have to file a claim with their own insurance company.
How do you add an additional insured?
Adding an additional insured could take as little as a few minutes, depending on your insurance provider.
Some business insurance companies, like Ergo Next, let you to add an additional insured yourself online. In other cases, you may have to call your insurance company.
When you add an additional insured to your policy, they'll also be added to your certificate of insurance.
How much does it cost to add an additional insured?
Most insurance companies let you add an additional insured for free.
What is a blanket additional insured endorsement?
If you find yourself adding additional insureds to your policies regularly, consider adding a blanket additional insured endorsement instead. This endorsement automatically extends your insurance coverage to others when contracts require it.
Read the language carefully, though — this endorsement might be limited to certain types of contracts or business entities.
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NerdWallet Small Business helps you get real-time quotes from 30+ insurers, and instant access to your Certificate of Insurance (COI) through our partner, Coverdash.
