Arkansas HVACR NewsMagazine May 2023

S tate, National, Chapter News State national Chapter News

Understanding the Additional Insured Status

Nick Hall Cross Pointe Insurance Advisors

I would guess that the majority of you have had to provide Additional Insured Status on your General Liability Policy to some other entity at some point in time. Do you know what you were providing to them? Did you have to pay additional premium to do that? This month we want to help you understand what an Additional Insured is exactly, and what you need to consider on your insurance policy regarding Additional Insureds. One of the questions I have had the most when needing to add an Additional Insured to my customer’s insurance policy is “What am I getting out of that?” The Answer as it obtains to your Insurance Policy: Nothing You are effectively granting another entity coverage under your policy. They are getting all of the benefit out of the insurance side. The Real Answer: You are likely fulfilling your contractual obligations to that party, and securing a job, obtaining a loan, or being able to rent a piece of equipment that you wouldn’t

otherwise be able to get without Adding that entity as an Additional Insured. Those are just a few examples of what you would then gain by adding an Additional Insured to your policy. The most common being… Work! So, when you list another entity as an Additional Insured, you are providing coverage to someone else from your Insurance Policy! They can then file a claim on your policy! Now, there are still some stipulations to that. The endorsement itself will outline the actual scope of coverage, but most Additional Insured Endorsements have a stipulation that the claim has to arise withing the scope of work between the two parties. Meaning if you provide a General Contractor Additional Insured Status, they cannot file a claim on your policy for a claim that they have for a project you had nothing to do with. What they can do though, is file a claim on your policy if they are sued due to your work on the job you are performing for them. The lawsuit does not have to be in your name anymore for your insurance policy to pay.