An additional insured (AI) is a third party you can add to your policy. This extends your coverage to them if your business is responsible for a claim that affects their business.
You’ve landed a great gig, signed the contract, and then you hear, “Can you add me as an additional insured?”
Umm, pause — what’s that?
Don’t worry; it’s not a trap or trick question. It’s a standard way to share protection and keep business moving. Here’s how additional insureds play a role in your small business insurance policy.
How Additional Insureds Benefit You
✔️ Build trust with clients and customers
✔️ Keep your business compliant
✔️ Say “yes” to more business opportunities
Additional Insured Explained: Protect Your Business and Win More Contracts
An additional insured (AI) is a third party you list on your policy, such as a client, venue, or partner. If a covered accident happens connected to your work, your policy is designed to help defend and pay covered claims for that party, too.
What “Additional Insured” Really Means (Without the Jargon)
Additional insureds are outside parties you add to your liability policy so your coverage can protect them for work you’re doing for them. It might sound a little funny, but hey, that’s just how insurance terms are!
Your policy essentially acts like an umbrella, shielding you both from the rainstorm of a claim caused by your business. That way, work can go on like normal, and your professional relationships stay intact.
What Is an Additional Insured on an Insurance Policy?
An additional insured on an insurance policy is someone, like a landlord, venue, or another business you are working with. They are not you, your employees, family, friends, or other vendors at an event.
It’s important to know the difference, and when you need to add someone as an additional insured or just show them proof of insurance. Otherwise, you risk having improper coverage or paying for other people to be added when you may not need to (and we’re all about saving you an extra buck around here!).
Additional Insured vs Other Policy Roles (Quick Guide)
| Who It Is | What They Do | Covered? | How It Works |
|---|---|---|---|
|
Named Insured |
You, the primary policyholder |
✅ |
– Full policy rights |
|
Additional Insured |
A person or organization added to your policy |
✅ |
– Insurance payouts for claims tied to your business |
|
Certificate Holder |
A third party who you give proof of your insurance to |
❌ |
– No rights under the policy |
We get that adding someone to your policy can feel intimidating, so it’s helpful to understand a few key points:
- Adding an additional insured will not affect how your coverage applies to you for a claim
- Additional insureds can’t change anything about your coverage
- Additional insureds can receive a special copy of a Certificate of Insurance that specifically shows their name on it
- In the event of a claim, the costs paid to an additional insured will not impact your coverage limits
- An additional insured does not have to file for a claim just because you do; the choice is up to them
- An additional insured may file for a claim you choose not to file for, and it does affect you
- You will not be charged or see an increase in your premium if an additional insured files a claim
Why Would Someone Ask to Be An Additional Insured on Your Policy?
Clients, venues, and landlords want to make sure they’re protected if something goes wrong that’s tied to the work you do. Listing them on your policy keeps risk clear and contracts clean, so everyone can focus on the job, not the what-ifs.
Look at it this way:
You’re attending an event as a vendor and someone trips over your booth display, breaking their wrist.
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The injured guest later sues you, the event, and the venue for the cost of their medical bills and missed wages at work from caring for the injury.
⬇️
Your insurance could cover your claim for the lawsuit since your booth caused the accident. However, the event host and the venue might face denied claims from their insurance company because they didn’t do anything directly to cause the accident.
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If the event and venue are listed as additional insured on your policy, they could also be covered for the cost of the lawsuit.
Real-Life Small Business Scenarios That Require Additional Insured Status
If you sell services at events, teach in shared spaces, or work on another company’s property, expect this request; it’s just normal business practice!
- Vendor at a local market: The market organizer asks to be added before you set up
- Landscaper for an HOA: The HOA wants additional insured status for on-site work
- Consultant teaching a workshop: The convention requires additional insured language in the contract
- Trainer renting gym space: The gym needs to be listed before you train clients
“Insurance Canopy has given us peace of mind to conduct our business and know that it, as well as our clients, [is] protected. The ease of accessing any policy documents and adding additional insureds has been a great asset. I would recommend them, and have, to anybody in the mobile entertainment business. They are worth checking out and definitely worth having on your side.”
—It’s About 2 Go Down Entertainment (Customer)
⭐⭐⭐⭐⭐
“I recently received an insurance policy from [an Insurance Canopy] customer; however, the submission did not include copies of the Additional Insured and Waiver of Subrogation endorsements. I reached out… by phone and email — they were very pleasant to work with and assured me they would address the issue. This morning, they provided the updated documents. I’m very impressed by their prompt and professional response.”
—Winny L. (Additional Insured)
⭐⭐⭐⭐⭐
How Being Ready to Add Additional Insureds Helps You Grow Your Small Business
When you can add additional insureds fast, you keep work moving, build trust, and book more business.
- You look professional: Quick AIs = instant credibility
- You get hired faster: Some gigs won’t book without it
- You keep momentum: No last-minute paperwork panic
- You build trust: Professionals you partner with see you protect them, too
With Insurance Canopy, you can add additional insureds to your policy online at little or no cost and generate unique Certificates of Insurance for each added party instantly. Just be sure to check your policy for specifics and costs!
Pro Tip: Keep a short “AI info” note on your phone with the details you’ll need to collect from them (legal name, address, email). You’ll look like a pro, save time, and make it easier on yourself to add them to your policy.
How to Add Someone as an Additional Insured (It’s Easy)
Adding an additional insured isn’t a roadblock — it’s your all-access pass to better gigs. Here’s how to add someone to your policy in just a few clicks:
- Log in to your Insurance Canopy account
- Enter the requestor’s info (legal name and address exactly as the contract states)
- Generate your COI, listing them as an additional insured
- Send the COI to your client/venue and keep a copy for your records
Ready to make it easy? Get covered, add who you need, and get back to doing great work today!
Common Questions About What an Additional Insured Is
What Is an Additional Insured Endorsement?
An additional insured endorsement is an add-on to your policy that changes the coverage from solely insuring you for a claim to insuring both you and any other named insureds.
Think of it like a widget that you can add to your policy and customize. It doesn’t change coverage for you, but changes the restrictions of who is covered to include the other person(s) you’ve added.
Why Would Someone Want to Be an Additional Insured?
Someone would want to be an additional insured so they can share your liability protection for the work you’re doing for them. It’s contract-friendly and helps everyone feel secure!
Does Adding an Additional Insured Cost More?
Adding an additional insured can cost more, depending on the policy you have. Many small business policies include the option to add additional insureds at no cost; others may charge per additional insured or bundle the price for unlimited add-ons.
There’s no one-size-fits-all price for additional insureds, and because some industries may be riskier than others or require more parties to be covered under one policy, there may be an additional cost.
What Does It Mean to Be an Additional Insured?
To be an additional insured means you are a third party listed on a policy and can be defended and paid for covered claims that arise from the policyholder’s operations.
Naming someone as an additional insured does not give them control over your policy, affect how your coverage applies to you, or impact your coverage limits in the case of a claim.
How Is an Additional Insured Different From a Certificate Holder?
A certificate holder only receives proof that you have insurance. An additional insured is actually added to your policy and shares certain protections related to your work.
