What are the risks of adding an additional insured?
Asked by: Rogers Corkery | Last update: June 25, 2025Score: 4.1/5 (28 votes)
What are the risks of adding additional insured endorsement?
Additional insured endorsements can also impact the insured's loss history, which plays a role in determining premium. "Loss history" refers to the losses paid on the policy. Losses paid for an additional insured are considered part of the client's history, and a negative loss history can often cause premiums to rise.
Should I add someone as an additional insured?
Don't put them as an additional insured. Their name will be included on any claim check your receive and you won't be able to cash it without their signature.
Why would someone be an additional insured?
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.
Why do landlords want to be listed as additional insured?
Having a landlord as an ``interested party/ additional insured'' is very common. It helps them validate that you are carrying the proper liability limits that they typically require (100k usually) in case you do damage to the property itself.
Additional Insured Explained
Should I add my property manager as additional insured?
The short answer is an emphatic YES. If you don't add your property manager as additional insured, and you and/or your property manager are sued by a neighbor, tenant, visitor, etc.
What rights does an additional named insured have?
Additional named insureds will have the same rights as named insureds; just typically won't be the ones in charge of paying those premiums.
What is the benefit of being added as an additional insured?
By providing coverage for the subcontractor via an additional insured endorsement, you are protecting yourself in the case that the subcontractor makes a costly mistake that leads to a lawsuit and the subcontractor is also protected in the event that you make a mistake that leads to a lawsuit in which they are named.
Does it cost anything to add an additional insured?
The cost to list an AI varies depending on the insurance company but can be as low as $50. Some insurers even permit policyholders to pay a flat rate and add as many as they would like. Beyond the initial costs, adding the endorsement will also affect the policyholder's premiums.
Should my contractor add me as an additional insured?
Property owners, both commercial and residential, commonly require any contractor working on their property to deliver a “certificate of insurance” naming the property owner as an “additional insured.” This often arises when a resident owner wishes to renovate his/her apartment in a co-op or condo building or an ...
When should I add someone to my insurance?
Significant others/partners/fiancés should be added to your policy if they live in the household and regularly operate your vehicle. Teen drivers and college students need to be added to your policy if they have a learner's permit or a valid driver license.
Can I add an LLC as additional insured?
Also, listing the trust or LLC as “Additional Insured” means that the trust or LLC and the individuals can be covered in one policy. However, a downside for this case is that there is less separation between the individuals and the entity itself as there is with listing the trust or LLC as “Named Insured”.
What is the difference between an additional insured and a certificate holder?
Certi cate holders hold proof of insurance, or certi cates of insurance (COIs), from insureds they are working with while additional insureds are those who have coverage extended to them through the “named insured's” policy.
Can you remove an additional insured?
How Can I Add or Remove an Additional Insured? Typically, this information is supplied on the initial application for insurance. If something changes from one year to the next and a party needs to be added to or removed from the policy, simply fill out and submit the Additional Insureds – Addition/Deletion form.
What is the difference between additional insured and loss payee?
The most obvious difference between loss payee and additional insured is in the insurance benefits they get. Additional insureds receive liability protection, while loss payees receive property damage coverage.
What is the difference between additional insured and interested parties?
Most insurance carriers allow you to add additional interest or additional insured parties to a variety of different insurance policies. The main difference between these two is that additional insureds are covered under the policy and additional interests are not.
Why would someone want to be listed as an additional insured?
The additional insured benefits from coverage and rights under the named insured's policy in the event of a claim. The purpose of additional insured endorsements is to keep the burden of risk closest to those parties most likely to create losses, which typically is third parties contracted to perform the work.
When should you be added as an additional insured?
Generally, if a smaller business wants to work with a larger business, the larger business will require that the smaller add them or their people as additional insured.
Why might a venue ask to be named as an additional insured on your insurance policy when hosting an event?
Your venue is asking to be added (named) as an Additional Insured because if you or any of your guests cause any damage to the venue or an injury at the event, the venue wants to be able to make a claim directly on your insurance policy.
Does it cost money to add an additional insured?
Adding a loss payee to a policy will not generally cost extra since it creates no additional risk. If you are adding an additional insured, your premium will increase. Adding a loss payee to a policy will not generally cost extra since it creates no additional risk.
Does an additional insured have the same rights as a named insured?
An additional named insured is a person or business that is named somewhere else in the policy. An additional named insured will have the same rights as a “Named Insured” but typically won't be responsible for the premium.
Why add a property manager as an additional insured?
BY ADDING YOUR PROPERTY MANAGER AS ADDITIONALLY INSURED, YOU'RE PROTECTING THEM FROM THE COST OF LAWSUITS THAT PROPERTY OWNERS COULD LIKELY END UP PAYING FOR. Bingo. While it might sound up front like property owners are protecting property managers due to this arrangement, they're really protecting themselves.
Can you sue an additional insured?
The cross-party exclusion is common, but many do not focus on it or understand its implications. This exclusion prohibits an insured party from suing another insured party under the same policy.
Who may be included on a homeowners policy as an additional insured?
Anyone who lives in your home, or has a financial stake in your home, can typically qualify for additional insured status. Of course, if they're your married partner, your blood relative or adopted child, they'll already be included in your policy as long as your home is their primary residence.
Is it legal for an insurance company to add someone?
Insurance carriers reserve the right to add anyone that they pull that has used your daughter's address for a mailing address, especially if that person shares a last name and it's where the insured vehicle is garaged for most of the time. They are typically given 30-60 days to do so.