What is an Additional Insured?

May 22, 2023

As a business owner, you may be asked to be listed as an additional insured on a client's insurance policy. This means that you are included as an insured party under the client's policy, in addition to the client themselves. Here are some reasons why being listed as an additional insured on a client's insurance policy can be beneficial:

  1. Protection against claims: By being listed as an additional insured, you are protected against claims that may arise from your work for the client. For example, if you are a contractor working on a project for a client and something goes wrong, you could be held responsible for damages or injuries that result. Being listed as an additional insured on the client's insurance policy can provide you with coverage for these claims.

  2. Compliance with contractual obligations: Many contracts require that the parties involved have certain types of insurance coverage. By being listed as an additional insured on the client's policy, you can ensure that you are in compliance with these requirements.

  3. Avoiding litigation: In the event of a claim or dispute, being listed as an additional insured can help avoid litigation between you and the client. Instead, the insurance company would handle the claim, which can be a more efficient and cost-effective process.

  4. Lower insurance costs: Being listed as an additional insured on a client's policy can also help lower your insurance costs. Since you are covered under the client's policy, you may not need to purchase as much insurance coverage on your own.

  5. Professionalism and good faith: Being listed as an additional insured can also demonstrate to the client that you are professional and have their best interests in mind. It shows that you are willing to take the necessary steps to protect yourself and the client from potential risks and liabilities.

In conclusion, being listed as an additional insured on a client's insurance policy can provide you with valuable protection against claims and ensure that you are in compliance with contractual obligations. It can also help avoid litigation, lower insurance costs, and demonstrate professionalism and good faith. If you are unsure whether being listed as an additional insured is necessary or appropriate for your situation, it is always a good idea to consult with a legal or insurance professional.