Additional Insured

An additional insured is a party, typically not the named insured, who is added to a liability insurance policy by endorsement and entitled to coverage for liability arising from the named insured's operations or specified activities. Additional insured status is common in commercial relationships where one party (the contractor, vendor, tenant, etc.) carries primary insurance and the other party (the owner, customer, landlord) wants protection for liability arising from the first party's operations. Standard ISO endorsement forms define the scope and limits of additional insured coverage.

Why parties want additional insured status

The principal reasons a party seeks additional insured status under another's policy: (1) direct insurance protection, separate from contractual indemnification, the additional insured can claim coverage directly under the policy if sued; (2) access to defense costs, the policy typically funds defense without requiring proof of the named insured's liability; (3) independent right against insurer, additional insured status creates rights independent of the named insured, so disputes between insured and insurer don't necessarily defeat coverage; (4) protection against indemnitor insolvency, if the indemnifying party (named insured) becomes insolvent, the insurance is still available.

Scope under modern endorsements, the "caused by" limitation

The 2004 and later ISO endorsements significantly narrowed additional insured coverage. Modern forms (CG 20 10 (04 13), CG 20 26 (04 13)) typically extend coverage only to liability "caused, in whole or in part, by" the acts or omissions of the named insured or those acting on its behalf. This phrasing limits coverage to liability arising from the named insured's conduct, not the additional insured's independent negligence. Older endorsements (CG 20 10 (10 93)) used broader "arising out of" language extending to liability merely connected with the named insured's operations regardless of fault. The edition date of the endorsement therefore matters, because older editions generally read more broadly.

Texas Supreme Court guidance

Evanston Insurance Co. v. ATOFINA Petrochemicals (Tex. 2008) construed an umbrella policy that covered an additional insured "only with respect to operations performed by" the named insured. The court read that language to require a causal connection between the injury and those operations, not proximate cause, and measured coverage by the policy rather than by the parties' separate indemnity agreement. In re Deepwater Horizon (Tex. 2015) addressed additional insured rights in the context of complex indemnification structures, holding that where the policy's additional insured language requires consulting the underlying contract, limits in that contract on the insurance to be provided also limit the additional insured's coverage.

Construction industry, TCAIA interaction

The Texas Construction Anti-Indemnity Act (Chapter 151 of the Insurance Code) generally voids construction contract provisions requiring indemnification of an indemnitee for the indemnitee's own negligence. Section 151.104 applies the same limit to additional insured coverage. A contract requirement or policy provision that would give an additional insured broader coverage than a valid indemnity could provide is void to that extent. The exception for consolidated insurance programs (OCIPs and CCIPs) is narrow and covers only policy provisions that list, add or delete named insureds. Indemnity for claims for bodily injury or death of the indemnitor's own employees survives under section 151.103, and section 151.105 leaves certain indemnity provisions untouched, including those for single-family houses and municipal public works projects. See Texas Construction Anti-Indemnity Act.

Common structural arrangements

Typical additional insured contexts: (1) construction contracts, owner is added insured on contractor's CGL; subcontractors add general contractor; (2) commercial leases, landlord is added insured on tenant's CGL covering tenant's operations; (3) vendor agreements, manufacturer adds distributor; product seller adds product manufacturer; (4) professional service contracts, client is added as an additional insured on the consultant's CGL; (5) event and venue contracts, venue is added insured on event organizer's policy; (6) licensing arrangements, licensor is added insured on licensee's policy.

Insurance certificates vs. endorsements

A certificate of insurance is informational only, it does not create coverage. Additional insured status is created by an actual endorsement to the policy, not by the certificate. Common contract drafting practice requires both: (1) the underlying policy must contain the additional insured endorsement; (2) the certificate must evidence that endorsement. Failure to obtain the endorsement (despite a certificate showing additional insured status) leaves the purported additional insured without coverage. For that reason, parties to material contracts often ask for a copy of the endorsement itself.

Primary vs. excess

Additional insured coverage is typically negotiated as either primary (responding before the additional insured's own insurance) or excess (responding only after the additional insured's own insurance is exhausted). Standard endorsements default to "other insurance" provisions that may make the additional insured's coverage primary or excess depending on the relationship. Sophisticated contracts specify primary status with a "primary and noncontributory" endorsement (e.g., CG 20 01) ensuring the named insured's policy responds first without contribution from the additional insured's own coverage.