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List of Partners vendors. Additional insured is a type of status associated with general liability insurance policies that provides coverage to other individuals or groups that were not initially named in the policy. With an additional insured endorsement , the additional insured will then be protected under the named insurer's policy and can file a claim in the event that they are sued.
Liability insurance provides insurance for the party named in the policy for protection against insurance claims due to injury or damage to property or individuals. Liability insurance policies provide coverage for the costs of monetary payments or payouts that the insured party might be responsible for if it's determined the insured party is legally liable.
An additional insured status in a liability policy extends the coverage beyond the named insured to include other individuals or groups that were not named in the original policy. Additional insured typically applies where the primary insured must provide coverage to additional parties for new risks that arise out of their connection to the named insured's conduct or operations.
These new individuals or groups are added to the policy through an amendment called an endorsement. The amendment may name the additional insured within the policy. However, other policies may use a blanket additional insured endorsement , which doesn't require the additional insured party to be named in the amendment.
Instead, a general description of the type of groups or individuals that are to be extended coverage is added to the named insured's policy. An additional insured amendment is helpful since it protects the individuals or parties that have been extended coverage under the named insured's policy.
If a claim is filed or a lawsuit materializes, the additional insured would be covered. Adding an additional insured is the responsibility of the named insured. Individuals or entities looking to be listed as AI should make this requirement apparent in their contract.
In order to add an additional insured to a commercial general liability insurance policy, the named insured would have to contact their insurance provider. Most providers make the process fairly simple as AI endorsements are a common aspect of conducting business. Adding the additional insured typically requires only the name and address of the individual or entity that the named insured would like to add.
Some providers will even allow their policyholders to pay a flat rate for the option to add as many additional insureds as they would like. The change in premium will depend on the nature of the endorsement, making communication with the insurance provider crucial to understand the exact total costs associated with taking on an additional insured.
Additional insureds have the ability to file a claim in the event they are sued after a risk event. The result of that claim, however, will be heavily dependent on the specifics of the endorsement. Misunderstandings of what is covered and what is not can still lead to the AI being held responsible for all or part of the ensuing damages.
That makes it all the more important for all parties involved to understand the specifics of the endorsement, which we will discuss in greater detail below. There are two major factors to consider for review if you hope to attain adequate additional insured coverage. Failing to submit the proper form could be severely detrimental to your company.
If a claim arises after the work has been completed on the project, the insurance would not cover the claim, as that endorsement does not provide coverage for completed operations.
The endorsement will need to be carefully reviewed to determine if the language is appropriate to provide the entity coverage that meets their expectations and contractual obligations. If the language is wrong or is written ambiguously, it will affect the scope of coverage for that person or organization if a risk event occurs.
AI endorsements are an important part of working with other entities. Businesses should, therefore, always maintain their own insurance policies to cover other liabilities that may not be covered as an additional insured. This is the person, group or company that owns an insurance policy and is typically who benefits from it.
So, if you purchased the insurance policy for yourself or your business, that makes you the policyholder and the named insured.
An additional insured is any person or company that you add to your insurance coverage. This is because some projects or contracts require policyholders to extend their liability coverage to other parties. Additional insured are named on your certificate of insurance COI but only have access to your if you send it to them as an electronic or physical copy. NEXT makes this process painless with our easy online tools.
A certificate holder is someone whom you have provided a certificate of insurance. The COI is proof that you have insurance at that point in time. A certificate holder will often request proof of your insurance and can contact your insurer to confirm that you have active coverage.
Many jobs will require you the policyholder to add the general contractor who hires you to your coverage as an additional insured. If the general contractor is both a certificate holder and an additional insured, it will be documented on the COI. Generally, when two parties are doing business, the smaller party usually has to have proof of insurance. If a small business wants to do business with a larger company, the larger company will often require the smaller company to have insurance before moving forward.
The additional insured entity can turn to your insurance policy if they are sued for your actions and will be covered according to your policy. For instance, if you're a personal trainer, any gym you've listed as an additional insured would be protected under your policy limits if there is an accident and you are held liable.
The certificate holder is still primarily responsible for his own direct liability and negligence. Here is an example of an actual claim. During the course of the event a set of wooden bleachers collapsed under the weight of the spectators. A spectator filed a bodily injury claim against the venue and promoter for his injury. The Insurer then declined the claim due to no negligence on the behalf of their insured and informed the venue to contact his own insurance company.
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