The status of “additional insured,” while demanded in a routine trend in commercial contracts around the planet, is not widely accepted by most business owners. In the typical scenario the business has secured a lucrative contract with a larger company. The larger company sends over a deal the smaller company must agree with in order to do business with larger company.
In the agreement, larger company demands additional insured status. Smaller company calls its insurance experienced and the representative or broker takes down some information and sends a facsimile later with an insurance certificate for smaller company to present to larger.
The issue of what rights this extends to larger company, or what coverage is diminished to smaller company, and what practical effect this agreement has, is rarely considered.
Look at your contracts, consider the “additional insured” require, consider your chief sub-contractors – what do their business insurance policies actually state? Look at the contracts your company signs with larger companies – does your company know what it is offering when it agrees to add an “additional insured?”