Additional Insured

What Does Additional Insured Mean?

An additional insured refers to parties who are covered by an insurance policy after a request is made by the primary insured party, who is the main beneficiary of the coverage. In other words, additional insured parties are added to the policy.

Insuranceopedia Explains Additional Insured

Additional insured parties are commonly included in commercial general liability policies because companies often hire other businesses to work on specific projects or events. Adding subcontractors or vendors as additional insureds is one of the most common reasons companies buy general liability insurance in the first place. For example, a contracting firm might hire an electrician to handle wiring. In such cases, the contracting firm may add the electrician as an additional insured party. This is because if the electrician makes a mistake that leads to an injury, the contracting company could be held liable. The additional insured coverage would help cover the resulting costs. The expense of carrying this kind of protection is usually built into what a contracting firm pays for its policy, which is one reason general contractor insurance tends to run higher than coverage for businesses that don’t subcontract work out.