In this guide
An additional insured is a person or company, other than you, that is added to your liability policy so it can be protected for certain claims connected to your work. Clients, landlords and general contractors often require it in contracts. It is created by an endorsement on your policy, not by a certificate of insurance, and its scope depends on the exact wording of that endorsement.
Key takeaways
- Additional insured status is added by an endorsement to your policy, usually general liability. A certificate alone does not grant it.
- Coverage for the additional insured is usually limited to claims tied to your operations or your work, not all of their business risks.
- Common forms split ongoing operations from completed operations, and contracts often ask for both.
- Adding someone can change your price, and the other party's own policy and contract terms still matter.
The basic idea
Imagine you are a painter hired by a building owner. A visitor falls on a ladder you left in a hallway and sues both of you. The owner wants your insurance to respond for the owner too, not just for you. If the owner is an additional insured on your general liability policy, that protection may apply, within the limits and terms of the endorsement.
You remain the named insured and the policy is still yours. The additional insured simply shares in your coverage for specified situations. This is different from the other party buying its own policy, and it does not replace it.
Why contracts require it
Requiring additional insured status is a risk transfer tool. The party that hires you wants the first line of defense to be the insurance of the party doing the work. Typical contract situations include:
- A general contractor requiring subcontractors to add it and the project owner.
- A landlord requiring a tenant to add the landlord and management company.
- An event organizer or venue requiring vendors to add it for the event.
- A client of a service business requiring vendors to include them.
The contract usually lists who must be added, which coverage types are involved and sometimes the specific endorsement forms. Share the contract language with your agent early, because small wording differences can matter.
How the endorsement works
Additional insured status is added to a policy by endorsement, which is a page that changes the policy's terms. Many US general liability policies use standardized endorsement forms published by an industry organization, while some insurers use their own wording.
Two commonly cited form types are:
- Ongoing operations forms (often referred to as CG 20 10 type endorsements) generally address claims arising while your work is in progress.
- Completed operations forms (often referred to as CG 20 37 type endorsements) generally address claims that appear after the work is finished.
Industry commentary notes that contracts often require both, since claims can surface months or years after a project ends. Form numbers and editions change over time, and edition dates affect the exact wording, so ask your agent to show you the actual endorsement your insurer would attach.
Blanket vs. scheduled additional insureds
| Type | How it works | Things to know |
|---|---|---|
| Scheduled | Specific named parties are listed on the endorsement | Clear, but you may need an endorsement for each new client or project |
| Blanket | Any party you are required by written contract to add is automatically included | Convenient for frequent contracts, but wording limits who qualifies |
If your business signs many contracts, a blanket endorsement may reduce paperwork. Ask whether it requires a written contract signed before the loss, and whether it limits coverage to what the contract requires.
What additional insured status does and does not give
What it may provide
- Defense and coverage under your policy for covered claims arising from your operations, within the policy's limits.
- Contract compliance, since many agreements make it a requirement.
What it usually does not provide
- Coverage for the other party's own separate negligence, depending on wording and state law. Some forms restrict this and some states limit what contracts can require.
- A separate set of limits. Additional insureds generally share your limits, so a claim involving several parties may draw from the same pool.
- Coverage under policy types that were not endorsed, such as workers' compensation. Other devices, such as waivers of subrogation, may apply there.
Good to know: State anti-indemnity laws, especially in construction, can limit how far a contract can push risk onto a subcontractor. A licensed attorney can explain how that works in your state.
Certificate vs. endorsement
The certificate of insurance that a requester receives may say that additional insured status applies. Industry sources are consistent on one point: the policy and its endorsements, not the certificate, control. A certificate that mentions additional insured status when the policy has no endorsement does not magically create coverage, and it can create problems for the person who issued it.
If you are collecting coverage from vendors, request a copy of the endorsement page along with the certificate. If you are providing it, double check that the endorsement is actually attached.
Watch out: Do not assume the endorsement exists because the certificate looks right. Ask your agent to confirm in writing which form is attached and which parties are covered.
Cost and underwriting
Insurers may charge extra for additional insured endorsements, or they may include a blanket endorsement at little or no cost. It varies by insurer and by the risk. Adding parties does not change how your own claims history affects pricing, but it can expand the situations in which claims arise. Our overview of what affects small business insurance costs explains other factors.
Steps to handle a request
- Read the contract. Note who must be added, the required coverage types, limits and any specific form numbers or wording such as "primary and noncontributory."
- Send the language to your agent. Ask whether your current policy has a suitable endorsement or whether one can be added.
- Review the endorsement. Check the form name, edition and who is covered, and whether it addresses completed operations if required.
- Get the certificate and the endorsement. Provide both if the contract requires proof of the endorsement.
- Tell the other party if something cannot be met. It is better to negotiate wording before work starts.
Contractors often work with several of these requirements at once, which is why our guide to contractor insurance is a useful companion. Limits that fall short of a contract may sometimes be met with an umbrella policy, if the umbrella carries matching terms.
Frequently asked questions
Is an additional insured the same as a certificate holder?
No. A certificate holder receives proof of your coverage. An additional insured is added to the policy by endorsement and may have rights under it.
Does adding an additional insured raise my premium?
Sometimes. Some insurers charge a fee per endorsement, others include blanket coverage in the base price, and some adjust rates based on the type of work. Ask for the cost before you agree to a contract.
Do additional insureds get their own policy limit?
Generally no. They share the limits of your policy, although separate or higher limits may be required by a contract and can sometimes be met with umbrella coverage.
Which policies can add an additional insured?
General liability is the most common, and commercial auto and umbrella policies can also include additional insureds. Workers' compensation does not work this way, though related provisions such as waiver of subrogation can be added.
What if my insurer will not add the endorsement?
Ask which alternatives exist, such as a different form, another insurer or revised contract wording. A licensed agent or broker can help you compare options.
Sources
- Insurance Journal – Can a certificate of insurance limit the breadth of protection provided by the policy and endorsements?
- IRMI – Avoiding common insurance certificate errors in contracting services
- Insurance Journal – Facts about the progressively narrowing coverage of contractors and additional insured endorsements
- Sonoma County – Contract insurance requirements: concepts and terminology
General information only. This guide explains general concepts and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy documents and speak to a licensed insurance professional or your state insurance department about your situation.