These days, just about every small business has insurance. And yours should be no exception. Besides protecting you from being sued, general liability insurance is often crucial to landing a job or growing your business, as many potential employers or projects will ask for a certificate of liability insurance form before accepting your services. Even gyms and yoga studios are starting to request them. What is an Additional Insured? We’re glad you asked.
While a certificate of insurance (COI) is crucial for showing that your business is insured, it isn’t always enough to land you a job. In fact, many places of work will ask for what is called an additional insured. If you’re confused about exactly what is an additional insured and what that means, you’ve come to the right place. We’ve got the answers you need! You can also check out our past articles on insurance terms; we’ve discussed premiums, deductibles, and more.
What is an Additional Insured, a Policy Holder and Certificate Holder?
Basically an additional insured is an individual or organization that is insured under the business insurance policy that you have purchased. In other words, the relationship looks like this:
You’re the one who purchased the insurance policy, and it covers mainly your activities. So that makes you the policy holder, as you’re the one with the actual insurance policy.
The person or company that you add to your policy, is referred to as an additional insured. They both have a copy of your Certificate of Insurance and are named on it; they’re sort of a certificate holder who is also named, sometimes referred to as a “named insured”.
A certificate holder is anyone who asks and receives proof of your insurance. They get an actual copy of the insurance certificate in their hands, or given today’s technology, in their inbox.
Keep in mind that when two parties are doing business, it is usually the smaller party that has to have proof of insurance. If a small business wants to do business with a larger company, the larger company will often require the smaller company to have insurance, in order to seal the deal between the two. That way, the larger party knows that they won’t be responsible if something unanticipated happens.
What Does Additional Insured Cover?
Additional insurance is an extension of your liability policy. When you add someone to this policy, you are giving them Additional Insured endorsement, and this in turn gives them access to your full coverage. That means, they can turn to your insurance policy in case they are sued for your actions, and are covered according to your policy.
So, for example, if you’re a personal trainer working in a gym and you have a Certificate of Insurance form, you could be asked to add your gym to this certificate as an Additional Insured. If one of your clients who you’re training gets injured at the gym and decides to sue, both you and the gym will be covered by your policy.
Similarly, if you’re a contractor going into a worksite you’ll likely want to add the place of work as an Additional Insured. Many jobs – especially those won through tenders or with large companies, both public and private – will absolutely require being added as Additional Insured as part of the bid. In addition to general liability for yourself and workers, it then also covers legal claims that may arise from your work or presence.
How Do I Add an Additional Insured?
Any liability insurance policy will offer you the option to add an additional insured. In fact, you can usually add as many individuals or companies as you need or want. How easy this is, however, depends on your insurance company.
An additional insured is generally either sent to you via the postal service or in some cases, sent to you via email as a PDF file, listing the place of employment as requested. It can then be printed or easily shared.
Almost every insurance policy offers this service. But some companies make it harder to get, as insurance agents take their time. At other insurance companies it’s costly, up to $50 per certificate, which can add up quickly for an active business.
Additional Insured with Next Insurance
Here at Next Insurance, we don’t like fees, and we don’t like making you wait. We know you’re busy and that you need to get back to your business. We’ve worked hard to make this process instant and free, with your PDF processed online in real-time. You can print as many Certificates as you need, add as many Additional Insured as you need, and it’s always free and online, 24/7.
And in the cut-throat business market, where quickly adding an Additional Insured to a policy can make all the difference in terms of getting a job, this is an advantage.
When Buying Insurance…
Remember to pay attention to a few fundamental factors when looking into purchasing your insurance policy, to make your life that much easier.
You should be looking for an insurance policy where:
- The actual certificate of insurance is free
- The additional insured service is free
- You don’t need to rely on an agent, to catch them on the phone or memorize their work schedule to process your request
- You don’t have to wait to get the additional insured certificate in the mail or by fax – instant and online is key!
You don’t want to be left hanging when your business is hanging on your insurance policy. Choose an insurance provider that partners with you, making it easy to show your certificate of liability insurance form and add more parties as Additional Insureds, as often and as quickly as you need. Now that you’re no longer wondering what is an Additional Insured, you’re free to go forward with your new knowledge. Good luck!