An "additional insured" is a person or business that is added to an insurance policy. This usually happens with clients of certain contractors. The business will ask to be added as an additional insured on a general liability policy so it has insurance protection in the event that contractor causes damage.
Additional insured status is an endorsement to a certificate of liability. The certificate of liability is proof of general liability insurance. If an individual or business requests to be added as an additional insured, the endorsement goes into the lower box marked "additional insured."
An additional insured endorsement does not necessarily cover damage in all circumstances. It might be limited in scope, based on the insurance company providing the policy. Some cover the additional insured only while the project is active, not after the project has completed. Coverage after a project is completed is known as "completed operations coverage." If there is no completed operations coverage, then the additional insured is not covered for construction defects after the job is complete.
"Additional insured" can also apply to auto insurance, where the additional insured person enjoys the same coverage as the primary insured. The additional insured on an auto policy is usually also equally responsible for paying the premium amount.
Primary or Excess
Additional insured insurance is usually considered “excess coverage” if the additional insured has other insurance, but not always. The section of the insurance coverage that covers “other insurance” will need to be reviewed to determine which policy is considered primary and which is considered excess.
An additional insured can claim against the primary insured if the activities of the primary insured cause damage. The primary insured may or may not be able to claim against an additional insured for damage. The insurance carrier makes the final decision regarding coverage.
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