Additional insured endorsements in general liability insurance

When a business owner purchases an insurance policy for their business, they are the primary policyholder, also called the named insured or primary insured.

An additional insured is an endorsement that can be added to many small business insurance policies, including general liability. This endorsement protects non-employees who work alongside your business from common risks, such as third-party lawsuits. Non-employees can include people like contractors, subcontractors, suppliers, and other businesses or people you work with and who take on risk by working alongside your business.

You can get an additional insured endorsement as an ongoing operations endorsement for projects that are still in progress, as well as a completed operations endorsement for work that is already finished but may result in an accident or injury after the fact.

While additional insured endorsements cover specifically identified individuals or groups, a blanket additional insured endorsement can cover anyone who may perform a certain job or function under your insurance.

For example, an additional insured policy on your commercial auto insurance will cover one subcontractor who drives your company vehicle, while a blanket endorsement will cover any subcontractor who drives your company vehicle.

Adding an additional insured endorsement can be beneficial for both you and those you work with and is an important aspect of risk management in the following ways:

Legal protection: Because they're taking on a degree of risk by working with your company, an additional insured endorsement can provide a layer of legal protection for those you work with against liabilities that may arise.

Financial defense: If a lawsuit occurs, both you and your business partners or subcontractors could be held financially liable for expensive lawsuits, repairs, or medical bills. Adding individuals or groups as additional insured parties can protect you both.

Building business relationships: An additional insured endorsement can help you develop business partnerships and secure contracts. In fact, many companies and contractors will only agree to work with you if they can be covered as additional insured under your insurance policies.

• Customer bodily injuries, such as a slip-and-fall on your business premise
• Customer property damage
• Advertising injuries, such as libel, slander, and copyright infringement

General liability insurance, occasionally called public liability insurance, is a must-have for businesses that are customer-facing and work with the public, which can have a major potential for lawsuits and incidents.

It's recommended for all types of industries and businesses, including limited liability companies (LLCs) and independent contractors. Often, proof of insurance is often required for business contracts and even commercial leases.

While a general liability policy protects its policyholder against many third-party claims, an additional insured coverage extends this protection to other named individuals and groups.

Those with additional insured status receive the same protection as the insurance certificate holder.

Your general liability premium is calculated based on your deductible, policy limits, exclusions, and other factors, such as the types of risk, size of the business, and location.

Because each additional insured endorsement is unique, you'll need to talk with your licensed insurance professional to discuss the exact terms and scope of coverage for your specific endorsement.

Any small business that works with individuals who take on risk but doesn't employ them directly should consider adding them under an additional insured endorsement.

There are a few professions that often get additional insured endorsements to their general liability coverage more than others:

Construction business owners should consider adding subcontractors as an additional insured party to protect against potential property damage.

For example, if a subcontractor accidentally damages a client's support beam during a construction project and causes structural damage, the client could sue your construction business.

This would be covered under your general liability policy as long as the subcontractor is listed on your additional insured endorsement.

Landscaping businesses should also add subcontractors as additional insured to their general liability policies to protect against third-party liabilities.

For example, if a subcontractor mistakenly hits a gazebo while mowing and a repair is necessary, the subcontractor would be covered from legal liability if they were previously added as an additional insured.

Manufacturers may want to consider adding sellers as additional insured to their general liability coverage.

If a seller sells a product of yours that ends up causing harm to a customer, they would be protected from liability if they are added as an additional insured to your general liability, which often includes product liability insurance.

Venues may ask event planners to be included in a policy with an additional insured endorsement to protect against potential damages that can occur during events.

Insureon helps small business owners by connecting them with the right policies and endorsements from the top insurance companies in the United States. Complete Insureon's free online application to get quotes and compare policies.

Our licensed insurance agents can discuss your general liability insurance options based on your insurance requirements, budget, and needs and assist you in obtaining coverage.

Additional insured endorsements can also be added to auto insurance and commercial property insurance, which your insurance agent can walk you through.

You can also discuss other popular and budget-friendly insurance options for your small business, including professional liability insurance (also called errors and omissions insurance), commercial auto insurance, or workers' compensation insurance.

Most Insureon customers receive their certificate of insurance and an active policy within 24 hours.