Additional Insured: Why It’s a Non-Negotiable Term in Business Insurance

If you're running a business—or working as a freelancer—chances are you've seen the term "Additional Insured" pop up in a contract or Certificate of Insurance (COI). It's often skimmed over, misunderstood, or assumed to be "just another insurance detail."

But here's the truth:
☑️ Adding the right people as Additional Insureds can protect your business.
☑️ Failing to do so can leave you exposed to claims you didn't see coming.

Let's dive into what "Additional Insured" really means, why it matters, and how to get it right—every time.

🔎 What Does "Additional Insured" Mean?

An Additional Insured (AI) is a person or organization that is not the policyholder, but is added to someone else's insurance policy—usually because they are involved in the work being done.

For example:

• A general contractor hires a subcontractor to do electrical work. 
• The subcontractor lists the general contractor as an Additional Insured on their liability policy. 
• If an accident happens related to the subcontractor's work, the general contractor is now covered too. 

In short, the AI has access to defense and indemnification under the same policy if a covered claim arises.

💼 Why Clients and Hiring Companies Require It

For companies that hire freelancers or independent contractors, requiring to be listed as an Additional Insured on the contractor's policy is standard—and smart.

Why?

✅ Risk Transfer: It shifts liability to the party performing the work
✅ Cost Protection: If there's a lawsuit or injury, your business's insurance isn't hit first
✅ Contractual Compliance: Many commercial leases, vendor agreements, and enterprise contracts require it
✅ Proof of Professionalism: It shows the contractor understands their responsibilities and is serious about the partnership

⚠️ Common Mistakes to Avoid

Despite its importance, "Additional Insured" is often misunderstood or missed entirely. Here are some red flags:

🚫 Relying on verbal agreement – Always get documentation (i.e., a COI)
🚫 Assuming you're covered automatically – You're not, unless it's explicitly listed
🚫 Failing to request it early – Ask for it before the contract is signed or work begins
🚫 Overlooking expiration dates – Confirm the policy is active and will remain so for the duration of the project

📄 What to Look For on the COI

When someone adds you as an Additional Insured, it should appear clearly on their Certificate of Insurance, usually in the "Description of Operations" section or a separate endorsement.

Check that it includes:

• Your company's name spelled correctly 
• The project or work being done 
• The policy number and limits 
• The effective dates of coverage 

Need help reviewing COIs? Bunker makes this process seamless.

🧩 How Bunker Helps with Additional Insured Compliance

If you're a hiring business, Bunker provides a streamlined way to set insurance requirements and ensure contractors meet them—including Additional Insured status.

If you're a contractor or freelancer, Bunker lets you:

• Easily request a COI with your client as Additional Insured 
• Customize policy endorsements in a few clicks 
• Instantly deliver compliant documents to your client 

It's a win-win for both sides of the contract.

💬 Final Thoughts

In today's freelance-heavy economy, the Additional Insured clause isn't just legal fine print—it's a core part of protecting your business relationships and limiting liability.

So whether you're the one hiring or getting hired, don't treat this as an optional add-on.

It's non-negotiable.

👉 Want to simplify managing Additional Insureds?
Learn more at buildbunker.com