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.
But what does that mean?
What is an Additional Insured on Your Contractor Insurance Policy?
“Additional insured” is a standard, run-of-the-mill endorsement requirement when it comes to contractors and construction.
Adding another person or entity as an additional insured on your policy means they are now protected by the terms of your policy as an insured. You are the named insured and the other person 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.
Let’s dive a bit deeper into the additional insured endorsement. Here’s what you need to know:
Not All AI Endorsements are the Same.
While an AI adds the protection of your policy to another party, the coverage afforded to the AI is usually restricted in some manner.
Some things that could affect coverage available to the additional insured include who may be liable for injury or damage, or the connection between you (the named insured) and the AI.
How Long is the Other Party Covered as an 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 could not file a claim directly with the insurance carrier.
The additional insured for completed operations endorsement extends coverage for the AI to include coverage for after the work is completed but it is much more expensive and sometimes unobtainable depending on the situation.
What’s the Difference Between a Blanket and Scheduled Endorsement?
Another difference in AI endorsements is whether they are on a blanket or scheduled basis.
- A blanket AI endorsement automatically adds the general contractor, 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.
How Do You Add an AI to Your Policy?
Do you need to add a homeowner, general contractor, vendor, or other party to your policy as an additional insured? Let Hunter Insurance help you!
Endorsements, policies, and risk management practices are always changing and evolving. At 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 and insurance evaluation.