If you’ve ever taken on a project and had the client say, “We need to be listed as an additional insured,” you’re not alone. The additional insured endorsement shows up in a lot of contracts, especially in construction, subcontracting, and commercial work.
But what does it actually mean? And why do clients care so much about it?
This isn’t just a formality or paperwork issue—it affects your coverage, your risk, and sometimes your ability to get paid. In this post, we’ll break down what the additional insured endorsement really is, why it matters to your clients, and how it impacts your insurance policy as the contractor.
Here’s what you’ll learn:
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What an additional insured endorsement actually does
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Why clients often require it in contracts
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How it changes your coverage and what to look out for
What Is an Additional Insured Endorsement?
An additional insured endorsement is a modification to your insurance policy that extends coverage to another party—usually your client or a general contractor. It’s a way of adding them to your policy so they’re protected if a claim is made that’s connected to your work.
Here’s a simple example: say you’re a subcontractor hired to install windows on a commercial building. If someone gets injured because of your work, the property owner might get pulled into a lawsuit—even if they had nothing to do with the job. When they’re listed under your additional insured endorsement, your policy can help cover their legal costs and potential damages.
This type of endorsement usually applies to general liability insurance, but it can show up in other areas too, depending on the contract and the risk involved. Some endorsements are written to cover a specific project or timeframe, while others (called blanket endorsements) apply to multiple clients or jobs without needing to update your policy each time.
The key thing to know is this: when you add an additional insured, you're sharing your insurance protection. That can affect your limits and how claims are handled. It’s not just a paperwork box to check—it has real implications for your coverage.
Why Clients Ask to Be Added as an Additional Insured
Clients aren’t asking to be added just to make your life harder—they’re trying to protect their own business. When a client asks for an additional insured endorsement, it’s usually because they want a legal safety net in case something goes wrong on the job.
Let’s say a contractor is doing electrical work on a commercial site. If an accident happens—maybe a fire caused by faulty wiring—the building owner or general contractor could get sued, even if they didn’t do the work themselves. By being added to the subcontractor’s policy through an additional insured endorsement, they gain access to that policy’s protection. That means your insurance, not theirs, could respond to the claim.
This is especially common in industries like construction, landscaping, or facility maintenance, where the work being done can create real risks for third parties. Clients often build this requirement into contracts, especially when there’s property damage, injury potential, or public exposure involved.
In many cases, it’s not optional. If the contract says your client must be added, they may not let you start work—or release payment—until that endorsement is in place. It’s a standard part of how liability is managed in project-based work.
Understanding why clients request an additional insured endorsement helps you avoid delays, protect your working relationships, and stay compliant with contracts.
How an Additional Insured Endorsement Affects Your Policy
When you add someone to your policy through an additional insured endorsement, it doesn’t just expand your paperwork—it can change how your coverage works. This is where contractors often miss the fine print.
First, your limits don’t increase just because you added someone else. If your general liability policy has a $1 million limit and a claim involves both you and the additional insured, you’re sharing that same $1 million. That can mean less protection for your own business if the claim payout is high.
Second, some endorsements are broad and apply to every job you do, while others are limited to a specific project, client, or time period. The project-specific option may be safer for contractors who don’t want to carry additional risk across unrelated work. On the flip side, a blanket additional insured endorsement saves time and paperwork for contractors who regularly need to add clients under multiple contracts.
There’s also the issue of control. When someone is added as an additional insured, they may have a say in how claims are handled—or even the right to be notified before your coverage is canceled. That can affect how quickly you’re able to respond if a dispute or accident occurs.
This part of your policy deserves more attention than it usually gets. The additional insured endorsement may seem like a favor to your client, but it can create ripple effects that you feel later—especially if a major claim hits.
How to Handle Additional Insured Requests the Right Way
When a client asks to be added under an additional insured endorsement, it’s not the time to guess or gloss over the details. How you respond can affect your coverage, your project timeline, and even your payment.
Start by reviewing the contract. Look for the exact wording—some clients want to be named as an additional insured for “ongoing operations,” while others want coverage for “completed operations” too. That small difference can affect what your policy actually covers. If anything seems unclear, your insurance agent should be your first call.
Next, confirm if the request is for a one-time project or if they want to be included on a blanket basis. Some policies already include a blanket additional insured endorsement, but only if certain conditions are met. Don’t assume it’s automatic—ask your carrier and get it in writing.
Be aware that endorsements can come with added costs. Some are included with your policy, while others require a fee, especially if the client wants custom wording or coverage beyond the standard language.
And finally, don’t skip the follow-up. Once the endorsement is issued, get a copy and confirm the client’s name is listed correctly. It’s not unusual for small mistakes—like a missing legal entity or outdated address—to hold up approvals or payments.
The additional insured endorsement may feel like just another checkbox, but how you handle it can say a lot about your professionalism—and help you avoid unnecessary problems down the road.
Know What You’re Signing Off On
The additional insured endorsement might seem like small print, but it carries real weight. It affects your liability, your policy limits, and how much protection you’re actually offering to someone else. Before you agree to add a client, take a few minutes to understand what they’re asking for—and what it means for your business.
If you work in higher-risk trades like excavation, these endorsements show up all the time. Make sure your policy is built to handle it. Check out this guide to Excavation Contractor Insurance to see how your coverage stacks up.
When it comes to insurance, knowing the details isn’t just helpful—it protects your reputation, your work, and your bottom line.