In an insurance policy, an refers to anyone other than the policyholder who is covered by an insurance policy. Coverage might be limited to a single event or it could last for the policy's lifetime.
Both individuals and groups can be given additional insured status, but their protection is more limited than the policyholder’s. The specifics depend on the policy, but an additional insured endorsement typically affords some crucial protection, such as:
Defense coverage. When a third party (i.e., someone who doesn’t work for your business) sues your additional insured, your policy can address the claim. That way, legal defense fees, court fees, and settlement or judgment costs don’t come out of the additional insured’s pocket.
Coverage for certain third-party lawsuits. This includes claims of bodily injuries, property damage, and advertising injuries (e.g., libel, slander, or copyright infringement). Most often, additional insureds are added to general liability insurance policies, but in certain situations they may be added to property insurance policies (e.g., a landlord might request to be added as an additional insured on a tenant’s policy).
For example, say you own an office building, and you hire a janitorial services company for cleaning services. The janitorial company can be held liable for visitors slipping and falling on recently mopped floors. In contract negotiations, the company could require that you add it as an additional insured on the building’s general liability insurance policy. That way, if the company is sued over bodily injuries that happen on your premises, your policy can protect it.
Depending on your industry, this could be a fairly common practice. For instance, suppliers or subcontractors may benefit from additional insured status when they work on your premises or on behalf of your business. By contrast, if you subcontract with a company, you may demand additional insured protection for yourself.
An additional insured endorsement can be used to provide many different levels of coverage. A blanket additional insured endorsement provides the same coverage to all additional insureds. For example, on a commercial auto insurance policy, a blanket additional insured endorsement provides the same coverage for any driver of your company vehicle. It's a common feature of many liability policies.