How to Protect Your Business with Additional Insured Status

how to protect your business with additional insured

Protect Your Business with Additional Insured Status

When two business work together, the smaller entity typically must have proof of insurance coverage. If you, as a small business, wants to work with a large company, you will almost always be required to have liability coverage. The larger company is assured that your company, not theirs, will be held responsible if something goes wrong.

Kinds of Policies That Can Include Additional Insured

An Additional Insured is usually added to general liability, professional liability policies and sometimes property damage coverage. An Additional Insured on your policy will be covered by your insurance if they are sued for your actions.

What Additional Insured Status Does?

When you add someone to your liability insurance policy, they are then considered to have Additional Insured status. The work done by your business at that particular location is covered. Listing an Additional Insured does not change your coverage, it makes it clear that any work you provide at the worksite is covered. Some businesses you want to work with or for will require that they be listed as an Additional Insured on your liability policy.

Who Should be Given Additional Insured Status?

Common reasons to add an individual or group to a policy include:

  • As a contractor, subcontractor or business owner, your client asks to be named as Additional Insured.
  • You ask to be named an Additional Insured by a contractor or subcontractor you hire.
  • You ask someone you refer to a client to give you Additional Insured status.

Types of Protection

Individuals or groups that you have given additional insured status have receive crucial protection.

1. Defense Coverage

In the event that your additional insured is sued by a third party – considered someone who does not work for your business – your policy can address the claim. The Additional Insured’s policy won’t have to be involved. Your policy will cover any court fees, defense fees, and judgement or settlement costs.

2. Other Kinds of Third-party Lawsuits

Third-party lawsuits against an Additional Insured listed on your property insurance policy are covered by your insurance. These kinds of suits claim property damage, bodily injuries and advertising injuries including libel, slander and copyright infringement.

Naming someone as an Additional Insured is common. Many companies automatically list a collaborating business, and/or request to be listed as an Additional Insured. This kind of insurance protection is vital to doing business.

Want to learn more about insurance protection for your business? Find out more and get quotes to compare here.

About Barbara Howington

In a 40-year career that began as editor for a college public affairs department, Barbara has been an instructional media script writer, public relations director, marketing manager, account manager, and co-owner of a graphic design, marketing and public relations firm. For the past several years, she has funneled her knowledge and insight into copywriting, her favorite part of every professional position she’s held.