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Additional Insured AI
Also called additional insured endorsement, AI status.
A status added to someone else's liability policy that extends its defence and indemnity to you for claims arising out of that party's operations.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
Liability insurance defends and indemnifies the named insured. An additional insured endorsement widens that protection to a second party — a lessor, a lender, a landlord, a general contractor — for claims connected to the named insured's work or the insured property. The endorsement is what does the work. The status is created by amending the policy, not by typing a name into a box on a certificate.
In small-business finance the request usually comes from an equipment lessor or a secured lender. Their exposure is that someone is injured by the financed machine or on the financed premises and sues everyone with a connection to it, including the party that holds title or a lien. Additional insured status puts the insurer's defence obligation in front of that claim.
The endorsement forms in general use are the CG 20 series published by the Insurance Services Office, and they are not interchangeable. Some cover only ongoing operations; some extend to completed operations after the work is finished. Some are limited to liability caused in whole or in part by the named insured's acts; some are broader. Which form is attached decides what you actually have, and the form number appears on the endorsement, not on the certificate.
Related but separate obligations often travel with it: a waiver of subrogation stopping the insurer suing the additional insured after paying a claim, primary and non-contributory wording so the additional insured's own policy is not tapped first, and a notice-of-cancellation requirement.
Where this one catches people
Additional insured is liability coverage. It gives you nothing when the property itself is damaged. A lender that needs to be paid when the financed equipment burns needs loss payee status on the physical damage coverage, which is a different endorsement on a different part of the policy. The two get swapped constantly because they sit in adjacent boxes on the same certificate, and nobody discovers the swap until there is a claim.
The second issue is scope. Being named on the policy does not mean being covered for your own independent negligence, and many current forms are drafted to exclude exactly that. If a lender or landlord has asked you for additional insured status, ask your broker which form is being used and get a copy of the endorsement itself — the certificate is a summary written by the broker and says on its face that it confers no rights.
Where you will meet this term
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Additional Insured — common questions
What does additional insured mean?
A status added to someone else's liability policy that extends its defence and indemnity to you for claims arising out of that party's operations.
Where does additional insured catch people out?
Additional insured is liability coverage. It gives you nothing when the property itself is damaged. A lender that needs to be paid when the financed equipment burns needs loss payee status on the physical damage coverage, which is a different endorsement on a different part of the policy. The two get swapped constantly because they sit in adjacent boxes on the same certificate, and nobody discovers the swap until there is a claim.
Is additional insured the same as an interest rate?
Additional Insured is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does additional insured apply to?
Term Loan, SBA Loan, Equipment Financing, Asset-Based Lending.
Is there a worked example of additional insured?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside additional insured?
Certificate of Insurance, Declaration page, Equipment lease, Insurance requirement, Landlord Waiver.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.