Additional Insured on Professional Insurance

When it comes to professional insurance, the concept of additional insured is often misunderstood but extremely important. Adding an additional insured means extending certain protections under your policy to another person or organization. This is commonly required in contracts and business agreements.

What Is an Additional Insured?

An additional insured is a third party—such as a client, partner, or contractor—who is granted coverage under your professional liability insurance. This ensures that if they are named in a lawsuit connected to your work, they share in your policy’s protections.

Why Add an Additional Insured?

• Contractual requirement: Many contracts require businesses to list their partners as additional insureds.

• Risk management: It helps protect business relationships and reduces disputes.

• Coverage extension: Provides a safety net if claims involve more than one party.

How It Works

If your business faces a claim and your client is named in the lawsuit, your professional liability insurance may defend and indemnify the client as an additional insured. However, the scope of coverage is usually narrower than what you receive as the primary insured.

Key Points

• Additional insured = third party covered under your policy.

• Commonly required in contracts and partnerships.

• Protects both you and your client from shared risks.

• Coverage is usually limited compared to the main insured.

• Always review the policy language to avoid gaps.

FAQ

1. Who can be added as an additional insured?
Typically, clients, project owners, or business partners who require shared protection in contracts.

2. Does it cost extra to add an additional insured?
Some insurers include it at no cost, while others may charge a small fee depending on the policy.

3. Does an additional insured get the same coverage as the policyholder?
No, coverage is usually narrower and applies only to work or services connected to the policyholder.

4. Can an additional insured file a claim directly?
They can be defended under the policy, but they generally cannot file independent claims unrelated to the named insured’s work.

Conclusion

Adding an additional insured to your professional liability insurance can strengthen business relationships and protect both parties against unexpected claims. However, it’s important to understand the scope and limitations of the coverage.

At THAgency, we work with nearly 100 carriers to ensure you get the right coverage tailored to your needs. With 30 years of professional experience, we’ll guide you through the process and help you secure the best protection.

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