What is an Additional Insured?
More than likely if you’ve been in construction for any length of time, you’ve been asked by a General Contractor, Vendor, Property Manager, or Homeowner to add them as an Additional Insured on your General Liability policy. It is a standard endorsement requirement when it comes to contractors and construction.
But what does that mean?
Adding another person or entity as an Additional Insured on your policy means they are now protected by the terms of your policy. You are the Named Insured and the GC, Vendor, etc would be an Additional Insured (AI) on the policy.
To the extent of the wording on the AI endorsement, the AI has rights to the policy protections and can file a claim directly with the insurance company without first going through you.
Not all AI endorsements are the same.
The coverage afforded to the AI is usually restricted in some matter. Aside from the issue of who may be liable for the injury or damage, when the injury or damage occurs as well as the connection between the Named Insured and the Additional Insured affect coverages available to the AI.
Most standard AI endorsements are for Ongoing Operations, meaning the AI has access to the policy coverages while the Named Insured is working for the AI. Once the job is completed, coverage for the AI ceases and they cannot file a claim directly with the insurance carrier. The Additional Insured for Completed Operations endorsement extends coverage for the AI to include coverage after the work is completed but it is much more expensive and sometimes unobtainable depending on the situation.
Another difference in AI endorsements is whether they are on a Blanket or Scheduled basis. A Blanket AI endorsement automatically adds the GC, Vendor, etc as an AI as long as there is a written contract or agreement between the two parties. Scheduled AI endorsements list the AI specifically on the policy and generally do not require a written contract or agreement.
Let Builder’s Shield help you!
Endorsements, policies, and risk management practices are always changing and evolving. At Builder’s Shield & Hunter Insurance, our specialty is Construction & Contractors Insurance. We have the expertise and skill to make sure you’re getting the right coverage for the right price. Call us today for a free risk assessment & insurance evaluation!