As you may suspect or already be quite aware of, commercial insurance is quite a bit more involved than personal lines for the most part.
Most businesses are required to work with at least one other company
in order to thrive. Simply being in business puts you and any of your
business partners at risk for liability claims arising out of any number of potential negligent actions
Having a commercial general liability policy is the first step to covering your ass(ets) when operating any business.
And the necessity of business to business relationships leads to the
need for two very common commercial insurance endorsements, which
include the “additional insured” and the “blanket additional insured.”
Let’s look at an example of where both may be necessary.
Additional Insured Endorsement: Any company that
operates their business in a building owned by another entity would need
to endorse their commercial general liability policy to add the company
who actually owns the property as an “additional insured.”
If someone slips and falls in the area leased by the insured, they
would have the right to sue the insured and the company who owns the
building. The business owner’s policy would respond by defending the
property owners in court against any lawsuit.
Depending on which insurer you purchase a policy from, endorsing an
additional insured may be free (up to a certain number) or quite
expensive. For perspective, contractor’s insurance policies will likely
charge “per additional insured.”
Blanket Additional Insured Endorsement: There are
some businesses that require so many additional insured due to their
day-to-day operations that a “blanket additional insured endorsement” is
the only effective way to manage it.
The key benefit to the additional insured blanket endorsement is that
it’s not necessary to notify the insurer every time you would like to
add coverage for a new company.
The insurer simply adds the endorsement to your policy and charges
you one flat rate. You may have as many additional insured as necessary
for the normal operation of your business.
This coverage endorsement is particularly valuable to contractors who
work with several other contractors at numerous job sites. Instead of
hiring an employee simply to stay in touch with the insurance company on
a constant basis, you pay the fee and go on about your business.
Deciding which type of commercial general liability policy suits your company best, based on coverage and overall insurance premium, may require the knowledge of a local insurance agent.