When we envisioned EducatorProtect, one of the key thoughts we had was that adding an additional insured should be easy and inexpensive. We felt like it was an important component of the insurance program. Much to our surprise, at first, almost nobody added or even really asked about adding additional insureds.
Well, my oversized ego is pleased to note that over the last few months questions about “additional insureds” have really picked up and are now rank among the top inquiries that we receive. With that in mind, I want to discuss what it means to add an “additional insured.
Let me say that “additional insureds” are the subjects of more books and legal rulings than I can count, so my description is obviously condensed and simplistic. But for educators,
Adding an additional insured provides coverage to that third party for claims or suits arising out of your (the named insureds) actions.
I would like to break the discussion into a few key points to remember:
1) This means that some third party expects that your insurance company will defend them if they are brought into a suit for your actions
2) Adding someone as an additional insureds in effect “dilutes” your insurance coverage because in a suit, you could be sharing your limits of insurance with a third party
3) Adding an additional insured increases the chances that your insurance will be brought into a tangential legal proceeding. Attorneys on both sides of legal proceedings look for any opportunity to find additional insurance coverage, and can attempt to drag in seemingly unconnected insurance policies in the hope of finding that coverage.
So, after reading this the obvious question is “Why would I ever add anyone as an additional insured?” The answer is “Because you may have to. ” If you are a subcontractor, or work on the grounds of a school or school system, they may require it as part of your agreement to work there.. It is common and appropriate to agree to that term. At the same time, I hope that you understand that it is not something that should be tossed around, or offered out of the blue.