Understanding what additional insured status means for your coverage.
If you are working with a subcontractor or another commercial entity on a project, the last thing you want is for your company to be held liable for the other party’s mistakes. This is why businesses can require the people or entities they are working with to protect them as additional insureds. Not sure what this designation is or how it protects you? Then read on to learn what additional insured status means for your coverage.
- What Does Additional Insured Mean?
When a person or entity is not automatically covered under another’s insurance, the policyholder can add them to their policy as an additional insured. Additional insured status means that your company is protected by another commercial entity’s coverage.
- Named Insured vs. Additional Insured
The main difference between a named insured and an additional insured is that a named insured is a person or entity specifically listed on an insurance policy’s declarations page. In contrast, an additional insured can only be added to a policy with an insurance endorsement. While a named insured will have full coverage under a policy, an additional insured is afforded a more limited scope of coverage. Because insurance providers see additional insureds as marginal risks, securing coverage for an additional insured is very inexpensive.
- When Can You Add and An Additional Insured?
Businesses can name a person or entity as an additional insured on specific insurance policies. For instance, it’s common to name an additional insured on general liability and professional liability policies. In some cases, additional insured status might be part of a contractual agreement. People or entities may only agree to complete work for your business if they are promised additional insured status.
This is what additional insured status means for your coverage. Do you have additional questions about your business insurance? If so, then contact the experts at 01 Insurance in Astoria, New York. Our dedicated team is eager to assist you with all your coverage needs today.