What is an “Additional Insured”?

What businesses should know about an additional insured.

These days, every business large and small has insurance. Yours should be no exception. If you’ve come across the term ‘additional insured’ and are confused about what exactly it means for your business, you’ve come to the right place.

Within an insurance policy, an additional insured refers to anyone other than the policyholder who is covered by the insurance policy. Depending on the policy, coverage might be limited to a single event, or it could last for the lifetime of the policy. In essence, it is an additional insured individual or organization that receives your business insurance coverage. The relationship looks like this:

Policyholder – You the person, group, or business in whose name an insurance policy is held.

Additional Insured – Any person or company that you add to your policy is referred to as an Additional Insured. They are named on your certificate. They are not obligated to pay premiums and typically do not receive notices of policy changes or cancellations.

When you add someone to your business insurance coverage, you are giving him or her an Additional Insured status. This means that your operations at that location are covered. The additional insured can then turn to your insurance policy in the event of a disaster and are covered according to your policy.

You can add an additional insured to your business insurance, but there are two common situations in which it makes the most sense:

  • You are a contractor/subcontractor/business owner, and your client asks to be named as an additional insured on your policy.
  • You hire a contractor/subcontractor, and you ask to be named as an additional insured on their policy.

Your insurance agent will be able to talk you through these terms to ensure you have the right business insurance coverage. For reliable business insurance you can count on, contact the team at Lou Aggetta Insurance Services today. We serve Pleasant Hill and neighboring cities of California.