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Additional Insured Endorsements and How They Work

When we talk about endorsements in insurance, we are talking about addendums that are added to an insurance policy in order to change the coverage provided by the policy. Endorsements can broaden or restrict a policy’s coverage.

What is an additional insured?
An additional insured endorsement adds another insured party to the policy. When an additional insured endorsement is added, there is a change made to the “Who Is An Insured” section of the insurance policy, extending coverage to an additional party.

When is it common to add an additional insured?
Most commonly, you’ll see businesses add additional insured parties to commercial general liability, professional liability, and commercial auto insurance policies. To qualify for additional insured coverage, a person or entity must meet certain requirements, which vary by the type of coverage:

1. General Liability Coverage
To qualify as an additional insured under a liability policy, a person or entity must have a business relationship with the policyholder.  A second requirement is the risk of lawsuits as a result of the policyholder’s negligence. For example, if you lease retail space from a commercial landlord and fail to keep your entrance safe, a customer could trip and fall, and sue you for bodily injury. They might also sue your landlord, contending they knew your premises was cluttered but failed to require you to clean it up.  Thus, your lease almost always requires you to include your landlord as an additional insured under your general liability policy.

2. Property Insurance
To qualify as an insured under another party’s property policy, a person or entity must have an insurable interest in the property covered by the policy.  For example, the equipment you purchase for your spa that is financed needs to be insured.  The lender will want to be listed on your policy as a loss payee in the event the equipment is damaged by fire, stolen, etc.

Should I include an additional insured on my policy?
In many instances, your lease will stipulate who needs to be added as an additional insured.  If it does not, please reach out to our insurance experts at ABE, who will guide you on this matter and ensure that you are properly covered. Simply call 1-800-444-7546 today, so we can serve your needs.