What is the risk of adding an additional insured?
Asked by: Mr. Osborne Schowalter Jr. | Last update: August 1, 2025Score: 4.3/5 (3 votes)
What are the risks of naming an additional insured?
If a judgement were to arise against both parties you would both pay out from the same set of limits on your policy. Instead of the named insured carrying a dedication 1 million for each occurrence its carrying 1 million per occurrence that may need to be shared with the additional insured involved in the claim.
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 add a company as an additional insured?
Defense Coverage: The main reason shippers want to be named as additional insured is for defense coverage. If a legal issue arises (like a lawsuit), they want to be assured that the freight broker's insurance will cover their legal defense.
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.
Why list someone as an additional insured?
The main benefit of an additional insured endorsement is that it will reduce the impact of the policy owner's loss history since the additional insured status serves to make sure that the financial responsibility of the claim is placed on the policy of the party that is most likely to be responsible for the claim.
Does it cost money to add an additional insured?
The cost of adding an additional insured is typically low, compared to the costs of the premium. Insurance company underwriting departments often consider the additional risk associated with additional insureds as marginal.
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.
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 ...
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”.
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.
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.
When should you be listed as an additional insured?
You may ask to be named as an additional insured to provide your business with more liability coverage. For example, say you use a contractor on a project who causes an accident that leads to you being sued.
Is it a problem to be double insured?
Having two separate plans can make processing health insurance claims more challenging. This is especially true if you need to file an out-of-network claim with both of your insurance companies. Your secondary insurer may also require proof of what the primary insurer paid before covering any costs.
What does it mean to add someone as an additional insured?
It simply means that the additional insured party has protection for liabilities you may bring to their business. You may wonder, “Why would I want to add an additional insured?” It may seem unusual, but it's a common business practice.
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.
What's the difference between loss payee and additional insured?
The difference is that additional insureds receive only liability protection whereas loss payees receive only property damage coverage. Another key difference is that additional insureds cannot receive payments for other liability claims involving the property, only matters in which they have a direct interest.
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.
Is additional named insured better than additional insured?
If limited coverage and rights under the policy are sufficient, an additional insured endorsement is likely the way to go. If the goal is to obtain complete and distinct coverage from all potential liability, being included as an additional named insured is your best bet.
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.
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 I add a client as an additional insured?
If your client was added as an additional insured, it would more than likely jeopardize your client's coverage, rather than increase it. If your client became a named insured on your PL policy, the client would, theoretically, be covered to the same extent as your design firm.
What happens when you add someone to your insurance?
Adding a driver to your policy means they're covered under your policy when they drive your car. If they get into an accident, your insurer is more likely to cover the damage. Sharing a car insurance policy, on the other hand, typically means both of your vehicles are covered under one policy.