“I got you, Babe.” It’s not just the title of a 1965 Sonny and Cher hit—it also aptly describes the relationship between a named insured and its additional insured. To clarify, an additional insured may be able to access the coverage provided by the named insured’s liability policy if the additional insured is potentially liable for a claim that relates to the named insured’s operations or premises. For a startup company, additional insured protection can be extremely beneficial, particularly if the additional insured doesn’t have to tap its own insurance or other resources to pay a claim. And, although there are a few drawbacks to additional insured status, these typically are outweighed by the benefits.
In this three-part Founder’s Tip series, we review some of the nuances of additional insured protection, not only by defining the term and how to obtain such coverage (Part I), but also by outlining its benefits and disadvantages (Part II), and by listing various risk management tips specific to additional insured status (Part III). At the end, you should have enough information to determine whether additional insured coverage is as “groovy” as it sounds.
“Additional Insured” Defined
To understand what an “additional insured” is, it’s easier to begin with what it is not. An additional insured isn’t a “named insured” or an “additional named insured.” These are persons or entities to which the insurance policy is issued. Named and additional named insureds may have broader protection and rights under a policy, but they may also have greater obligations, such as paying premiums.
In contrast, an “additional insured” is a person or organization that is added to a named insured’s policy by endorsement. A named insured typically adds an additional insured to its policy to comply with a contractual agreement between itself and the additional insured that requires the named insured to do so. Additional insureds have fewer responsibilities and obligations under an insurance contract than named insureds, but don’t always enjoy the same scope of coverage or rights under the policy.
Obtaining Additional Insured Status
Additional insured status is granted through a contractual agreement between the insurer and named insured in the form of a policy endorsement. The endorsement may either specifically name the additional party or provide a general description in “blanket” form. To guarantee that you have been added as an additional insured and have obtained the coverage that you negotiated for, you should ask the named insured for a copy of the endorsement and policy, in addition to the certificate of insurance. The certificate of insurance isn’t always accurate or complete and doesn’t constitute a valid copy of the contract or prove the terms of the policy.
Conclusion
Understanding the concept of being an additional insured and how to obtain such coverage is the first step in determining whether this status is right for your company. In the next installment of “I Got You Covered,” we discuss the benefits and downsides of additional insured status so you can continue to analyze whether it is truly a good fit or not.

Building Your Personal Brand: Top 10 Takeaways
In celebration of Women’s Entrepreneurship Day, Valeska Pederson Hintz and Wendy Moore of Perkins Coie hosted a fireside chat with Elisa Schreiber and Priya Cherian Huskins on the theme of “Command Your Narrative: Building a Resilient Personal Brand for Women Entrepreneurs.” Elisa, a partner at Greylock and […]

Fundraising Without General Solicitation
When you’re building the next big thing in the startup world, it’s easy to overlook some crucial regulatory requirements in your quest for success—especially when it comes to fundraising. Securities laws (which apply to any fundraising) tend to be an afterthought for many founders, but this oversight […]

Rise in Popularity of AI Transcription Services Brings Litigation and Disclosure Risks
The increasing use of artificial intelligence (AI) transcription and note-taking services in virtual meetings allows participants to focus on discussions without the distraction of taking notes. But this convenience comes with novel litigation and disclosure risks that businesses must assess and manage as they roll out these […]