Additional Insured

In construction Contracts you are frequently asked to provide Certificates of Insurance that list the person or company requesting the certificate as an Additional Insured.  Typically this means the person or company making the request would like the policy to automatically respond to a claim as if they had actually purchased the policy for themselves.  Keep in mind they did not.  You did.  That means that you may or may not be able to meet this requirements depending on  the coverage you have purchased.

Your business is the “Named insured.” An “Additional Insured” is a person or business that is specifically included as an insured under the policy issued to your business. You will want to check with your carrier or agent as to how to go about adding ABC Co. as an “additional insured” on your policy. Sometimes carriers add specific businesses as additional insureds by means of an endorsement in which the specific company, in this case ABC Co., is expressly listed as an additional insured. Other times carriers provide what is called “blanket additional insured coverage,” pursuant to which any person or organization qualifies as an “additional insured” under the policy if certain terms or conditions are met. You’ll need to look to the specific terms of the endorsement to the policy to know what the terms and conditions are, but generally this means that you have entered into a contract with the additional insured prior to the loss and the loss arises out of your work or operations for that additional insured. If after you contract with ABC Co. to landscape, and your work accidentally causes damage to a nearby building because you forgot to turn off a hose and the building flooded, ABC Co. would potentially be an additional insured under your policy if your policy has a blanket additional insured endorsement.

If you enter into a contract with ABC Co. in which you are required to provide insurance for ABC Co. as an “additional insured,” obtaining a certificate of insurance is not enough. You will need to have your certificate specifically show that ABC is either scheduled as an additional insured or you have blanket coverage that will respond.

Also you need to be sure your additional insured endorsement provided by your carrier meets the terms and conditions of your contract.  Typically this will ask that the endorsement includes products and completed operations.

If you are the one REQUESTING your subcontractors list to you as an additional insured, be sure to ask for a copy of the endorsement to confirm that they are covering you for their completed operations.  Otherwise the certificate they gave you is only good as the paper it is printed on.

To learn more about additional Insured endorsements and special issues related to them, click here.

Here is another great article on Additional Insured status