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Insurance & Bonding

Additional Insured

In Plain English

A third party added to someone else's insurance policy so they're also covered.

Definition

An additional insured is a party other than the named insured who is granted protection under an insurance policy. On construction projects, owners and general contractors frequently require subcontractors to add them as additional insureds on the subcontractor's commercial general liability policy. This grants the additional insured the right to file claims directly under that policy for covered losses arising from the subcontractor's work.

Why It Matters in Bidding

Additional-insured status is a core risk-transfer tool that shapes who pays when something goes wrong on a job. GCs and owners require it so a sub's policy responds first to losses arising from that sub's work, preserving their own loss history and limits. Estimators and PMs must confirm subs can actually furnish the required endorsements before award, because non-conforming coverage stalls execution and shifts risk back upstream.

Example

Before issuing a subcontract, the GC's PM rejects a framer's certificate because it lacks the CG 20 10 and CG 20 37 additional-insured endorsements, and withholds the contract until the sub's carrier provides compliant coverage naming the GC and owner.

Related Terms

Certificate of InsuranceCommercial General Liability (CGL)Liability Insurance

Frequently Asked Questions

It transfers liability risk to the party whose work caused the loss. Naming the GC and owner as additional insureds lets them seek defense and coverage directly under the sub's general liability policy, protecting their own policy from claims, preserving their limits, and keeping their loss history clean for future bonding and insurance renewals.
A certificate of insurance is informational evidence that coverage exists; it does not grant any rights. Additional-insured status is created by a policy endorsement, such as the CG 20 10 or CG 20 37 forms, that actually extends coverage. Contractors should require the endorsement itself, not just the certificate, since a certificate alone confers no protection.
Primary and noncontributory means the sub's policy pays first and the additional insured's own policy is not called upon to contribute until the sub's coverage is exhausted. Contracts often require this language alongside the additional-insured endorsement so the upstream party's coverage truly sits in excess rather than sharing the loss proportionally.

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