Here's a scenario that plays out thousands of times every day: you're a contractor about to start work on a project, and the client's contract includes a clause requiring you to add them as an "additional insured" on your liability policy. Or maybe you're a small business owner renting commercial space, and your landlord wants to be added to your insurance. Your first thought? What does that even mean, and how much is this going to cost me?
Additional insured endorsements are one of those insurance requirements that sound complicated but make perfect sense once you understand them. Essentially, you're extending your liability coverage to protect someone else—not out of generosity, but because it's almost always a condition of doing business together. Let's break down what these endorsements actually do, what they cost, and how to handle them without the headache.
What Is an Additional Insured Endorsement?
Think of your general liability insurance as a protective shield. Normally, that shield covers you—the named insured—and your employees. An additional insured endorsement extends that same shield to cover another party, but only for claims that arise from your work or operations.
Here's why this matters: imagine you're a plumbing contractor working on a commercial building. You accidentally cause water damage that leads to a slip-and-fall injury. The injured person could sue both you and the building owner. If the owner is listed as an additional insured on your policy, your insurance would defend them and cover their liability—but only for incidents related to your work. This protects the building owner without them having to file a claim on their own policy or pay for a separate insurance policy to cover your activities.
It's important to understand what additional insured status is not. Being listed as an additional insured is completely different from being a certificate holder. A certificate of insurance is just proof that you have coverage—it's like a receipt. The certificate holder can't file claims or get coverage under your policy. An additional insured, on the other hand, gets actual protection and can file claims when covered incidents occur.
Types of Additional Insured Endorsements
Not all additional insured endorsements work the same way, and understanding the differences can save you from nasty surprises down the road. There are two main categories: scheduled endorsements and blanket endorsements.
Scheduled endorsements list each additional insured by name. Every time you need to add someone, you contact your insurance company, they update the policy, and you pay a fee—typically $25 to $300 per party depending on the size and risk of the project. This approach gives you precise control but can become expensive and administratively burdensome if you're constantly signing new contracts.
Blanket endorsements are game-changers for busy contractors and service businesses. For a flat annual fee, a blanket endorsement automatically covers anyone you're contractually required to add as an additional insured. No need to call your insurer every time you sign a contract. No individual fees. You sign the contract, and they're covered. This is usually the smarter choice if you work with multiple clients or take on more than a handful of projects per year.
Beyond the scheduled versus blanket distinction, you also need to know about the specific ISO forms that define what's covered. The most common are CG 20 10, which covers ongoing operations, and CG 20 37, which covers completed operations. Ongoing operations means the work is still in progress—if something goes wrong while you're actively working, the additional insured is covered. Completed operations means protection extends even after you've finished the job. If a defect in your work causes an injury six months after you leave the site, CG 20 37 would cover the additional insured. Many contracts require both forms to avoid gaps in coverage.
How Much Do Additional Insured Endorsements Cost?
The good news is that adding additional insureds is generally affordable, especially compared to the alternative of losing a contract or facing uncovered liability. For scheduled endorsements, most insurers charge $25 to $50 per additional insured for smaller projects or lower-risk parties. If you're adding a major general contractor or property owner on a large construction project, that cost can jump to $300 or more because of the increased exposure.
Blanket endorsements usually add a flat fee to your annual premium—often a few hundred dollars depending on your industry and policy limits. If you regularly add multiple parties throughout the year, this flat fee quickly becomes more economical than paying per-party charges. Some insurers even build blanket additional insured coverage into their standard business policies at no extra cost, so it's worth asking your agent whether this is already included.
Keep in mind that while you're the one paying for the endorsement, it's protecting both you and the other party. If a claim arises, your policy responds first, which can prevent the additional insured from filing a claim against you directly or tapping into their own insurance. That makes it a relatively low-cost way to strengthen business relationships and demonstrate professionalism.
Common Contract Requirements and What to Watch For
When you review a contract that requires additional insured status, pay close attention to the specific language. Many contracts will specify the exact ISO form numbers they require, such as CG 20 10 and CG 20 37. Don't assume your current policy includes the right forms. Check with your agent to confirm you have the correct endorsements before you sign the contract.
Be aware of potential coverage limitations that could leave you or the additional insured exposed. One common limitation is the sole negligence exclusion, which means the additional insured isn't covered if they are solely at fault for the claim. Another is the "no broader than required by contract" clause—your policy will only provide the minimum coverage required by the written agreement, nothing more. If your contract is vague or doesn't specify coverage details, the endorsement might not provide the protection either party expects.
Also, understand that additional insureds don't receive policy notices. If your policy is canceled or non-renewed, the additional insured won't get a heads-up from your insurance company. It's on you to notify them if coverage changes. This is another reason why maintaining continuous, adequate coverage is critical when you're contractually obligated to provide additional insured status.
How to Add an Additional Insured to Your Policy
The process is simpler than you might think. Start by reviewing your contract to identify exactly what's required—which endorsement forms, what coverage periods, and whether ongoing and completed operations are both needed. Then contact your insurance agent or carrier with the details. If you have a scheduled endorsement, you'll provide the additional insured's name, address, and the specifics of the project or relationship. Your insurer will issue an updated policy or endorsement page listing the additional insured.
If you have a blanket endorsement, the process is even easier—just confirm with your agent that your blanket endorsement is active and complies with the contract requirements. You typically won't need to notify your insurer for each new contract, but you should keep documentation showing that the contract requires additional insured status and that your blanket endorsement covers it.
Once the endorsement is in place, request a certificate of insurance that lists the additional insured by name and references the endorsement. This certificate serves as proof for the other party that they've been added and are covered. Make sure the certificate is accurate—errors or omissions can cause problems if a claim arises or if the contract requires proof of coverage before work begins.
Making Additional Insured Endorsements Work for Your Business
Additional insured endorsements aren't just a box to check—they're a strategic part of managing risk and building strong client relationships. When you understand how they work and what they cost, you can negotiate contracts more confidently and avoid coverage gaps that could put your business at risk.
If you're frequently asked to add clients, landlords, or other parties as additional insureds, talk to your insurance agent about a blanket endorsement. The upfront cost is minimal compared to the convenience and savings over time. And if you're on the receiving end—say, you're a property owner or general contractor requiring subcontractors to add you—make sure your contracts clearly specify which endorsement forms you need and what coverage periods apply. Vague contract language can lead to disputes or inadequate protection when you need it most.
The bottom line? Additional insured endorsements are a low-cost, high-value tool that keeps everyone protected and projects moving forward. Whether you're signing contracts or writing them, understanding these endorsements puts you in control and helps you avoid unpleasant surprises when things go wrong.
