What Is an Additional Insured Endorsement? The Clear Explainer

"Additional insured" is one of the most commonly requested and most commonly misunderstood terms in commercial insurance. Clients, landlords, general contractors, event venues, and municipalities all ask for it. Many people asking for it do not know what coverage it actually confers. Many policyholders adding someone do not understand the implications for their own coverage.

This is the clear explanation that other sources typically bury in insurance jargon.

What an Additional Insured Endorsement Is

An additional insured endorsement is a modification to a commercial insurance policy - typically general liability - that extends coverage to a third party (the additional insured) for claims arising from the named insured's operations.

The "named insured" is the business that purchased the policy. The "additional insured" is the party added to that policy. The additional insured gains the right to make a claim under the named insured's policy for certain covered events.

The standard scenario: a general contractor (named insured) hires a subcontractor to do electrical work. The sub's GL policy lists the GC as an additional insured. If a third party is injured due to the sub's electrical work and sues both the sub and the GC, the sub's policy covers the GC as an additional insured for claims arising from the sub's operations.

The key phrase is "arising out of" or "caused by" the named insured's operations. The additional insured status extends coverage to the GC only for claims connected to the sub's work - not for claims caused independently by the GC's own negligence.

How Additional Insured Coverage Works: What It Does and Does Not Cover

What additional insured status covers:

Third-party claims against the additional insured that arise from the named insured's operations. If the named insured (your subcontractor, vendor, or service provider) causes harm through their work and the additional insured (you) is sued as a result, the additional insured endorsement provides:

• A defense by the named insured's carrier for the additional insured
• Coverage for settlements or judgments against the additional insured for the named insured's acts or omissions
• This coverage is typically subject to the same limits and conditions as the named insured's policy

What additional insured status does not cover:

The additional insured's own independent negligence. If you (the additional insured) caused harm through your own actions - separate from the named insured's operations - the named insured's policy does not cover that. Your own GL policy covers your own negligence.

Claims unrelated to the named insured's operations. An additional insured's status is tied to the specific relationship that triggered the endorsement. A landlord named as additional insured on a tenant's policy is covered for claims arising from the tenant's operations on the premises - not for claims arising from the landlord's own unrelated activities.

The named insured's own claims. The named insured cannot use their own policy to sue the additional insured. The coverage runs from the policy to third parties making claims against the additional insured.

Example of correct use: A client hires you as a consultant to work on-site at their facility. They ask to be named as additional insured on your GL policy. While you are working at their facility, you accidentally damage their production equipment, causing $80,000 in property damage. A claim is filed under your GL policy. The client, as additional insured, has their interests protected by the same policy covering your operations.

Example of incorrect expectation: The same client as additional insured expects the policy to cover their own unrelated slip-and-fall incidents at their facility that have nothing to do with your work. That is not what additional insured status provides. The client needs their own GL policy for their own operations.

Who Typically Requests Additional Insured Status

General contractors. Require subcontractors to name the GC as additional insured on sub's GL policies. Standard practice in construction.

Commercial landlords. Require tenants to name the landlord as additional insured on commercial GL policies. Required in virtually all commercial leases.

Event venues. Require vendors, caterers, and event planners to name the venue as additional insured before setup.

Project owners and clients. Require contractors, consultants, and service providers to name them as additional insured when work is performed at the client's direction.

Municipalities and government entities. Require additional insured status for businesses operating in public spaces, parks, or rights-of-way.

Mortgage lenders and property owners. Require additional insured status on commercial property policies in some financing structures.

The additional insured request is so common that most businesses with any commercial relationships will encounter it regularly. Having a policy that can accommodate additional insured requests is a baseline requirement for most commercial activity.

How to Add an Additional Insured to Your Policy

The process is straightforward but requires specific steps.

Step 1: Identify the legal entity name. The additional insured endorsement must reflect the exact legal name of the entity being added. "ABC Properties" and "ABC Properties LLC" are different legal entities. Get the correct name from the contract or the requestor.

Step 2: Request the endorsement from your carrier or broker. Tell them you need to add an additional insured and provide the legal name. Many policies allow blanket additional insured endorsements (see below) that cover all required additional insureds automatically.

Step 3: Confirm the endorsement language. The specific form of the additional insured endorsement matters. The ISO CG 20 10 (ongoing operations) and CG 20 37 (completed operations) are the most commonly required forms in construction contracts. Some contracts specify which endorsement forms are acceptable.

Step 4: Issue an updated certificate of insurance. The COI should reflect that the additional insured endorsement is in force. Send this to the requestor.

Cost: Most carriers charge $25 to $75 per additional insured endorsement for individually named parties. A blanket additional insured endorsement covers all required additional insureds for a flat annual fee - typically $150 to $400 per year - and is more cost-effective if you regularly add additional insureds.

The Difference Between Additional Insured and Certificate Holder

This distinction matters for landlords, project owners, and anyone requiring proof of insurance.

Additional insured:

• Has coverage rights under the named insured's policy
• Can make claims under the policy for incidents arising from the named insured's operations
• Is protected from third-party claims connected to the named insured's work
• Receives notification of policy cancellation or changes (as specified in the endorsement)

Certificate holder:

• Is listed on the certificate of insurance as a party interested in the coverage
• Receives copies of cancellation notices if the policy is cancelled
• Has NO coverage rights under the policy
• Cannot make claims under the policy
• Has no protection if the named insured causes harm

Being a certificate holder means you receive paperwork. Being an additional insured means you have actual coverage. Landlords, project owners, and anyone who can be sued as a result of another party's operations should insist on additional insured status - not just certificate holder status.

Frequently Asked Questions

Does being named as additional insured cost the named insured anything? Most carriers charge $25 to $75 per individually named additional insured endorsement. For businesses that add additional insureds frequently (contractors, consultants, event vendors), a blanket additional insured endorsement is more economical - it adds all required additional insureds automatically for a single flat fee.

Can the additional insured use the policy to recover their own losses? No. Additional insured status provides protection against third-party claims, not first-party coverage. The additional insured's own property damage or business losses from their own operations are not covered by the named insured's policy. Those require the additional insured's own first-party coverage.

Does additional insured status survive policy cancellation? No. If the named insured's policy is cancelled or not renewed, the additional insured status disappears with it. This is why continuous coverage and timely renewal are important - an additional insured's protection is only as good as the underlying policy.

What is the difference between "ongoing operations" and "completed operations" additional insured? ISO CG 20 10 covers the additional insured for claims arising from the named insured's ongoing operations - work being performed. ISO CG 20 37 covers the additional insured for claims arising after operations are completed (completed operations). Construction contracts often require both forms because defect claims frequently arise after project completion. Confirming which form your contract requires before requesting the endorsement prevents compliance disputes.

Can I require someone to add me as additional insured if it is not in our contract? You can request it, but without a contractual basis, the named insured has no obligation to comply. Additional insured requirements are most reliably enforced when they are specified as contract terms - in a vendor agreement, lease, subcontract, or service agreement - before work begins.