Additional insured
A third party, client, principal or lessor, added to another's policy to benefit from its liability cover, a routine practice in construction and service contracts that shifts risk toward the contractor's insurer.
An additional insured is a person who is not the policyholder but is added to the policy by endorsement to benefit from its cover, generally for claims arising from the named insured's activities. The practice is routine in construction and service contracts, especially in the United States: the project owner demands to be an additional insured on each contractor's liability policy, the landlord on its tenant's, the principal on its subcontractor's. The aim is to make the contractor's insurer bear third-party claims linked to its work, even when the client is sued. For the underwriter, each additional insured widens exposure without significant additional premium, and the endorsement's wording matters: cover limited to ongoing operations or extended to completed operations, liability caused by the named insured only or also by the additional insured's own acts, primary and non-contributory status that prevents the insurer from sharing the loss with the client's own policy. Disputes between insurers on these points are a permanent source of defense costs.
Textbook case: a subcontractor's worker is injured on a New York job site and sues the project owner. The owner, an additional insured on the subcontractor's policy with a primary and non-contributory clause, tenders the claim to the subcontractor's insurer, which must defend and indemnify it before the owner's own policy is called on.
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