August 21, 2025
Why You May Need Additional Insured Coverage and How to Obtain It
Standard liability insurance may not fully protect a business if it is found vicariously liable—meaning it is held responsible for damage or injury caused by contractors or partners working on its behalf. Additional insured coverage ensures that your company is covered under another party’s insurance policy, preventing direct liability exposure.
There are two main ways to secure this protection:
- Contractual Indemnity – Your contract requires the other party to cover liability costs arising from joint operations.
- Additional Insured Endorsement – The contractor adds your company to its liability policy, offering direct coverage.
Courts often favor additional insured endorsements over contractual indemnity, as indemnity clauses can create unfair bargaining situations for subcontractors.
Certificates of Insurance & Policy Considerations
Businesses typically request a certificate of insurance to verify additional insured coverage. However, this certificate is not binding, and the policy owner can cancel coverage without notice. For high-risk projects, businesses should require an endorsement that mandates insurer notification before cancellation.
Considerations for Subcontractors
Subcontractors facing frequent requests for additional insured endorsements can simplify the process with a blanket additional insured endorsement. This automatically applies coverage to all contractual agreements, though it limits protections—coverage may end once work is completed, leaving gaps in liability protection.