The additional insured has direct rights to defense from the named insureds insurance carrier, and must be provided a separate defense. Understanding named insureds and additional insureds. Defense of an additional insured is paid in addition to the limits of liability. In many cases, compli ance with the request for additional insured status is a prereq. In addition to his executive role, he continues to serve as product manager for, managing editor of irmi update, and executive editor the risk report. You can email as many certificates as you need, add as many additional insured as you need, and adding an additional insuredcertificate holder is always free and online, 247. Your current access to irmi content does not include the additional insured book. Additional insured endorsementsa potential minefield part 2. In us insurance policies, an additional insured is a person or organization that enjoys the benefits of being insured under an insurance policy, in addition to whoever originally purchased the insurance policy. It is the party that adds another to its policy, the named insured that faces most of the problems rather than the party being added the. The insured may do this for a variety of reasons, including wanting to avoid the time and expense of protracted litigation, avoiding the burden and disruption of discovery during that litigation, or the real and unfortunate need to have cash in his or her pocket to make needed repairs. White whose insights and expertise were instrumental in developing this article. Kealy walks the reader through memorable answers to these kinds of questions that are faced everyday by insurance professionals, attorneys, risk managers, and any business that regularly.
A certificate of insurance is usually requested by one party in an agreement, contract or transaction to make sure another party has the appropriate insurance coverage. There are circumstances under which modern insurance policies can apply coverage to noninsureds. Change your entire approach to requiring or granting additional insured status with this definitive source for additional insured status and strategies. Additional insured certificates are free for race organizers and sponsoring clubs. The additional insureds recovery cannot exceed the policy limitations, and would need to have excess coverage of its own. Additional insureds are often included under general liability, commercial property or commercial auto policies. Additional insured is a type of status associated with general liability insurance policies that provides coverage to other individualsgroups that were not initially named. Rather than litigating the amount of coverage, an insured may and often does settle the claim. Understanding named, automatic and additional insureds in. Im hoping that an insurance guru does pick a fight because your article makes me question my habitual rejection of the other sides occasional request to be an additional named insured, or possibly even to be a named insured most requests are simply to be an additional insured. One of the most common reasons for providing additional insured coverage is a contractual requirement. Understanding named, automatic, and additional insureds in.
Additional insured entries may be left blank if shown elsewhere in this policy for this coverage. Properly protecting one party from liability caused by the negligence of another party with which it is contracted is complicated. Arising out of the claimed negligence of the additional insured other than that directly caused by your work which shall be imputed to the additional insured. Differentiating between additional insureds and additional. Insureds should be careful not to release an entire policy.
If coverage provided to the additional insured is required by a contract or agreement, the most we will pay on behalf of the additional insured is the. New builders risk insurance book published by irmi. Additional insured community association underwriters. Named insured vs additional insured insurance town and. The book is a singular resource covering the position and role of additional insureds, and it is written with a realworld, practical perspective by insurance lawyers steeped in the daily business and legal realities of insurance. To learn more about this publication, please click here.
Additional insured endorsementssa potential minefield part 2 february 2006 part 1 of this series deals with the connection between the named insured and the additional insured and provides some areas to consider in a basic analysis of any additional insured endorsement. Additional insured summary below is a summary of each additional insured endorsement available in the new iso bop program and their use. The additional insured book examines approaches, problems, and caselaw associated with additional insured endorsements for property and liability insurance. An additional insured is another person or business that may be specifically listed and can be protected through your insurance policy usually the liability portion. The additional insured book discusses not only the additional insured issues related to commercial general liability insurance but also property. They cover the person or company listed in the endorsement only. The ai cannot change or cancel the policy the named insured. If you would like the additional insured to appear under the insured section on the. In the event of an insured loss, the named insured and any additional insureds would suffer a financial loss. An additional insured is a person or organization added to an insurance policy at the request of the individual specifically named on the policy also known as the named insured. Most often it applies where the original named insured needs to.
The additional insured nonprofit risk management center. The most we will pay on behalf of the additional insureds scheduled above is the lesser of. Additional insureds an additional insured is a person other than the named insured who is protected by the terms of the policy and has an insurable interest in the subject matter of the policy. The risk of utilizing additional insureds kegler brown hill. As an additional insured, moreover, you are typically covered for claims arising from the named insureds negligence or from negligence committed jointly by you and the named insured. This contradicts the additional insureds intent in asking to be named as an additional insured in the first place. Bp 04 02additional insuredmanagers or lessors of premises this endorsement adds as an additional insured the owner of premises from whom the named insured leases property or the owners real estate manager. The risk of utilizing additional insureds kegler brown construction newsletter november 1, 2001 by don gregory the construction industry has increasingly utilized additional insured requirements where the owner, architect or contractor are to. You probably dont want to be an additional named insured. Rights of canada are added as additional insureds but only with respect to liability arising out of the insured operation.
Additional insured coverage is typically provided via an endorsement. The named insured is the only party that has the power to make changes to the policy, cancel the policy, or make any other modifications. Written by highly regarded insurance experts, the additional insured book provides key insight and practical guidance into a number of cuttingedge areas that are barely touched by most other publications. An additional insured, in contrast, is generally a person or entity that is doing business with the named insured or additional named insureds, p arties doing business together commonly request and receive additional insured protection, but rarely understand the full benefits and risks associated with the coverage. Being a named or additional insured not always necessary.
Widespread belief might say this statement is true. At its most elementary nature, the aim of further insured protection is to protect the extra insured from claims of vicarious legal responsibility, thats, legal responsibility based mostly solely on the connection between two insureds, versus any lively negligence on the a part of the extra insured. Additional insured and contractual indemnity coverage in. The additional insured may, in fact, have broader coverage than the named insured under certain circumstances. To any employee of the named insured or to any obligation of the. The handbook on additional insureds, second edition. Jack gibson is the coauthor of 11 reference works on insurance and risk management, all published by irmi, including contractual risk transfer, construction risk management, and the additional insured book. Why do i need to add an additional insured to my business policy. Relying on its advice, many producers, risk managers, and. New insurance forms have impact on additional insureds. Third, if a client who is an additional insured files a claim against the design firm, there is an immediate conflict of interest. They might be named as a certificate holder or they might be named as an additional insured. Most contractors, lessors, mortgage holders, manufacturers and service providers are familiar with certificates of liability insurance. Gibson, cpcu, cris, arm when adding product to a cart you must specify the quantity the quantity must be greater than 0 and less than 9,999.
They might want to be named as an additional insured for ongoing operations, completed operations, or your work. The term generally applies within liability insurance and property insurance, but is an element of other policies as well. Becoming an additional insured now may be easier 12. The additional insured is never entitled to more benefits than what the original insured is under their own policy.
According to the additional insured book, 7th edition, published by. The handbook on additional insureds serves as that useful resource by addressing all points practitioners are confronted with when coping with this complicated protection. Dallas, tx, january 21, 2014 international risk management institute, inc. Referring to the additional insured book, the court echoed the authors sentiments that when a certificate misrepresents additional insured status, it should become a matter of principalagency liability. Additional insured requests related to general liability or commercial. It should be noted, however, that coverage provided under the additional insured endorsement is often limited to liability arising out of acts performed by or on behalf of the named insured. The named insured extends protection to the additional insured under the terms and conditions of the named insureds policy. In this book, attorney and insurance professional dwight m. Additional insured an entity to which insured status is extended subject to the terms and conditions of the insurance policy issued to the named insured. With combined business experience of over 80 years.
Download the handbook on additional insureds pdf ebook. Irmi releases seventh edition of the additional insured book. They are added to the policy by endorsement, and the. It also provides coverage for the additional insured, even if the. Problems with additional insured status a variety of potential coverage problems confronts both additional insureds and named insureds. If you subscribe to the additional insured book online you now have access to the seventh edition. With respect to the insurance afforded to these additional insureds, the following is added to section iii limits of insurance. Cg 20 10 11 85 this edition provides coverage for ongoing and completed operations.
Please attach additional copies of this page as needed. An additional insured endorsement may provide no coverage for claims that are attributable to your negligence alone. The term additional insured means a person or entity that is covered under another partys insurance policy. Insurance carriers often add the association to the contractors cgl policy as an additional insured by endorsement. This is the document that displays the insureds name, insurer, types of. It should not detrimentally affect the additional insured, who otherwise would be punished i. The additional insured endorsement on a commercial auto insurance policy will cover anyone else who may drive company vehicles without giving a specific name. Ira, this article challenges my understanding of the named insured and additional named insured negotiations. Additional insured refers to persons who are not named insured but have been added to the policy by means of endorsement by the named insured.
According to the insurance and risk management institute, an additional insured is, a person or organization not automatically included as an insured under an insurance policy who is included or added as an insured under the policy at the request of the named insured. If you are requiring or providing additional insured endorsements, you should know what they mean. Another problem with additional insured status, particularly for the named insureds insurer, involves the possibility of conflicts of interest in defending claims. Now let me try to help you understand what that means in laymans terms. Additional insured endorsement understanding the importance of edition dates. Before we can explore the use and misuse of additional insured status, we need to gather some perspective about who is insured by a typical, standard, camp general liability insurance policy. It is possible to have this type of additional insured status on other types of insurance policies as well.
Irmi releases seventh edition of the additional insured. To determine who is protected by a liability insurance policy, we must examine the first page of the policy. Considering a request to add an insured by endorsement or on a certificate can be intimidating, particularly if a request is made to explain the difference between a party named as an additional insured or named as an additional named insured in general, being a named insured gives that party greater rights under the policy. However, some additional insured endorsements may require specific names. A person or organization added to a policy after the policy is written with the status of named. And in the cutthroat business market, where quickly adding an additional insured to a. In short, an additional insured is another entity covered by your insurance. This book remains the definitive source for additional insured status and strategies. Every day, thousands of people request and receive proof of someone elses commercial general liability cgl insurance. The concept of additional insured status is complex and can result in misconceptions, confusion, and conflict. Why edition dates matter for additional insured endorsement.
1534 1684 1162 926 832 563 791 98 1360 310 397 1476 454 1225 241 1361 4 1033 889 175 608 970 462 1164 1336 426 344