The pros and cons of additional insured status flip depending on which party you are. If you are being added, you get someone else’s policy to defend you, but with narrower coverage than you probably think, no control, and no reliable warning if the policy lapses. If you are doing the adding, you win the contract, but you have just handed a share of your own limits to someone else. That is the central point almost every article misses: adding an additional insured does not create coverage. It divides yours. Three technical details decide the whole thing: whether an endorsement actually exists, which form number it is, and whose limits get spent.

Additional Insured: Key Facts at a Glance

Question	Short answer
Does the additional insured pay premium?	No. The named insured pays.
Does it add coverage?	No. It shares the named insured’s existing limits.
Is a certificate of insurance proof of coverage?	No. It creates nothing and guarantees nothing.
Is a certificate holder an additional insured?	No. Those are different things.
Which form covers ongoing work?	CG 20 10
Which form covers work after completion?	CG 20 37, and you need it separately
Where do most construction claims arise?	After the work is finished
Does the additional insured get cancellation notices?	Generally no, despite what the certificate implies
Can the additional insured control the policy?	No. No changes, no cancellation, no decisions.
Does it cover the additional insured’s own negligence?	Not under current forms, no

The Question Is Wrong, and That Is the Problem

“Pros and cons of additional insured” has no single answer, because two completely different people are asking it.

A general contractor asks it and means: what do I gain by requiring my subs to add me? A subcontractor asks it and means: what am I giving away by agreeing? A landlord and a tenant ask it from opposite sides of the same lease. A marketing agency asks whether to add a client; the client asks whether to demand it.

The pros for one party are, almost line for line, the cons for the other. So the useful version of this page is not a list. It is a mirror, held up to whichever side you are standing on.

And underneath both sides sits one mechanic that nobody leads with. An additional insured endorsement does not manufacture new insurance. It lets another party stand inside the coverage that already exists, and spend from the same pot of limits. Every additional insured you add is one more person with a claim on the same tower of coverage you bought for yourself.

Hold that thought. Everything below is downstream of it.

What Is an Additional Insured?

An additional insured is a third party added by endorsement to somebody else’s liability policy, receiving limited protection for claims that arise out of that policyholder’s work.

The classic setup: a property owner hires a general contractor for a renovation and requires the contractor to add the owner as an additional insured. A visitor trips over a power cable and sues both. Because the injury relates to the contractor’s work, the contractor’s general liability policy can respond for the owner too.

Now change one detail. The visitor sues the owner over something unrelated to the renovation, a broken step at the far end of the building. The contractor’s policy almost certainly does not respond, because the claim does not arise out of the contractor’s work.

That boundary is the whole product. Additional insured status is not general protection. It is protection for the specific slice of risk that the named insured brought onto the site.

Additional Insured vs Named Insured vs Certificate Holder vs Additional Interest

Four terms, routinely confused, with very different consequences.

Status	Coverage?	Controls policy?	Gets notices?	Pays premium?
Named insured	Full policy coverage	Yes, fully	Yes	Yes
First named insured	Full policy coverage	Yes, and manages it	Yes, including cancellation	Yes
Additional named insured	Nearly full, often can file claims	Often yes	Yes	Sometimes
Additional insured	Limited, tied to named insured’s work	No	Generally no	No
Additional interest	None	No	Yes, on cancellation	No
Certificate holder	None whatsoever	No	No	No

Two rows deserve underlining.

Certificate holder is not additional insured. A certificate holder is simply the entity that asked for a copy of the certificate. It confers no coverage rights at all. If your contract required additional insured status and all you received was a certificate naming you as certificate holder, you have received a piece of paper and nothing else.

Additional interest is not additional insured either. An additional interest is a party with a financial stake in the insured property, like a lender on a vehicle. They get told when the policy cancels. They get no coverage.

The distinction between additional named insured and additional insured is the one that costs real money in disputes. An additional named insured has close to the policyholder’s own rights: file claims, receive correspondence, sometimes change or cancel coverage. An additional insured gets protection and nothing else. It is the difference between owning a share of something and being allowed to shelter under it.

Why Would Someone Want to Be Listed as an Additional Insured?

The pros, from the perspective of the party being added.

Somebody else’s insurer defends you. This is the real prize, and defense costs alone often dwarf settlements. If a claim arises out of the contractor’s work, the contractor’s insurer takes on your defense.

It does not touch your own loss history. Claims paid under their policy do not sit on your record driving your renewals. That is quietly one of the biggest benefits and it rarely gets mentioned.

It puts risk where the control is. The party doing the work is the party best placed to do it safely. Additional insured status is contractual risk transfer: the risk follows the operations.

It backs up your indemnity clause with actual money. An indemnity agreement is only as good as the other party’s balance sheet. An insurance policy behind it turns a promise into a funded promise.

Your own limits stay intact. Their tower absorbs the hit, not yours.

What Are the Risks of Being an Additional Insured?

Now the cons, same party. These are substantial, and this is the section most pages skip.

The coverage is narrower than you think, and it has been narrowed four times. The 1985 form covered liability “arising out of” the named insured’s work, which courts read expansively to mean almost any connection. Then it shrank, repeatedly:

• 1993: ISO narrowed the trigger from “your work” to “your ongoing operations,” which cut off claims arising after the job finished.
• 2001: ISO introduced CG 20 37 to sell completed operations coverage back to you as a separate endorsement.
• 2004: The wording changed to liability “caused in whole or in part by” the named insured’s acts or omissions, eliminating coverage for the additional insured’s own negligence.
• 2013: Two more limits landed. Coverage applies “only to the extent permitted by law,” and it “will not be broader than that which you are required by the contract to provide.”

Read that last one carefully. If your contract asks for less than the endorsement would otherwise give, you get the lesser amount. Your contract language now caps your own coverage.

Most people’s mental model of additional insured status is the 1985 form. The form they actually hold is from 2013.

You do not control the policy. You cannot change it, cannot cancel it, cannot make decisions about claims.

You will probably not be told if it lapses. This is the misconception that hurts people most. The certificate may promise 30 days notice of cancellation, but the ACORD 25 form itself carries a disclaimer stating that this language imposes no obligation on the insurer to actually provide it. Only the first named insured reliably receives cancellation notice. Sources disagree about whether an additional insured “may” receive notices, and that ambiguity is precisely the problem. If notice matters to you, require a specific notice endorsement rather than trusting the certificate.

The endorsement can vanish at renewal. Additional insured status only exists while the policy is in force with that endorsement attached. If the subcontractor drops it at renewal, your completed operations protection quietly disappears and nobody calls you.

You are sharing limits with strangers. More on this below, but it is the biggest one.

A typo can void it. Misspell the additional insured’s name, list the wrong project address, or reference the wrong contract, and the insurer has grounds to deny. Scheduling errors are where a large share of additional insured disputes actually begin.

The Risk of Adding an Additional Insured

Flip the mirror. You are the contractor, the vendor, the tenant, and someone has asked to be added to your policy. Here is what you are agreeing to.

You are giving away your limits, not buying new ones. Your $1 million per occurrence does not become $2 million because two parties are now insured under it. It stays $1 million, and now there are two of you drawing from it. If a single claim exhausts the limit defending and indemnifying your general contractor, you have nothing left for yourself on that occurrence.

The aggregate is worse. Completed operations claims erode the products-completed operations aggregate. If you carry a $2 million aggregate across multiple projects, a claim from an entirely different job can drain the pot before your additional insured’s claim is paid. The mitigation exists and is worth knowing: a per-project aggregate endorsement, CG 25 03, gives each project its own aggregate rather than sharing one across your whole book.

Your loss history absorbs their claims. Every claim tendered by an additional insured is a claim on your policy, sitting on your record, priced into your renewal. You pay for that at every renewal for years.

The requests escalate. Third parties routinely ask for additional insured status bundled with primary and non-contributory wording, waiver of subrogation, and a 30-day notice requirement. Each is a separate endorsement and each is a further transfer of risk onto you. “Just add us as additional insured” is often four requests wearing one coat.

You may not be able to say no and keep the work. Which is the honest reason most contractors agree, and it is fine, as long as you know what you traded.

Who Should Be Listed as an Additional Insured?

The test is simple and most contracts fail it: the party being added should face liability arising from your work, and nothing more.

Reasonable candidates:

• Project owners and general contractors on construction work
• Landlords, for tenant operations at the premises
• Clients who could be dragged into a suit over your work product
• Venues hosting your event
• Municipalities issuing permits for work in public spaces

Unreasonable requests worth pushing back on:

• Parties with no connection to your operations
• Open-ended lists of affiliates, parents, subsidiaries and assigns with no defined relationship to the job
• Anyone asking to be covered for their own sole negligence, which current forms do not do anyway and which several states prohibit by statute in construction contracts
• Requests that arrive after a loss. Additional insured status generally requires a written contract executed before the loss.

Why Do Landlords Want to Be Listed as an Additional Insured?

Because a landlord gets sued for things tenants do.

Someone slips in your restaurant, and the plaintiff’s attorney sues the restaurant and the building owner, because that is how litigation works. The landlord did nothing wrong. The landlord still needs a defense, and defense is expensive even when you win.

Additional insured status on the tenant’s liability policy means the tenant’s insurer picks that up, rather than the landlord’s own policy taking the hit and the renewal increase that follows.

It is a legitimate request, and it is standard in commercial leases. Two things to check if you are the tenant. First, that it is limited to liability arising from your operations at the premises, not the landlord’s own negligence somewhere else in the building. Second, that the lease is not also demanding waiver of subrogation and primary and non-contributory wording without saying so plainly.

Should My Contractor Add Me as an Additional Insured?

If you are hiring a contractor to work on property you own, yes. Ask for it in the written contract, before work starts.

But asking is the easy part, and this is where the money is lost. Ask for the right form.

CG 20 10 covers you for ongoing operations only, meaning while the contractor is working. Most construction claims do not arise while the crew is on site. They arise later, when the roof leaks, the deck fails, the wiring smoulders.

Here is the example that makes it concrete. A roofer finishes your roof. Five weeks later the chimney falls onto the neighbour’s greenhouse. You are named as additional insured on the roofer’s CG 20 10. You are not covered, because the work was complete. That is a completed operations claim, and CG 20 10 does not reach it.

So require both: CG 20 10 for ongoing operations and CG 20 37 for completed operations. A certificate showing only CG 20 10 leaves a gap that opens the day the contractor drives away, and it is the gap where the largest payouts live.

Then require them to maintain it. Additional insured coverage only works if the policy is still in force when the injury occurs. Sophisticated owners require contractors to carry completed operations coverage for a set number of years after the job, ideally matching the state’s statute of repose for construction defects, which runs roughly 4 to 15 years depending on the state. The gap between how long a contractor will actually keep paying and how long you can still be sued is one of the biggest unaddressed risks in construction.

Should I Add a Client as an Additional Insured?

Usually yes, and usually it is fine.

For most professional services, agencies, consultants, IT vendors, the exposure is modest and the client’s request is routine contract hygiene. Refusing costs you the contract and gains you very little.

Where to be careful:

Check the scope. “Additional insured for any and all liability” is not the same as “additional insured for liability arising out of our services.” Insist on the second.

Check what else is bundled. Primary and non-contributory means your policy pays first and their insurer contributes nothing until yours is exhausted. Waiver of subrogation means your insurer gives up its right to recover from them even when they caused the loss. Both are real concessions and both need your insurer’s agreement.

Check the count. One client as additional insured is nothing. Forty clients as additional insureds on a single $1 million policy is forty parties sharing one limit, and you will never notice until two of them claim in the same year.

Talk to your broker before you sign, not after. Some of these requests need endorsements your policy does not currently carry.

How Much Does It Cost to Add Someone as an Additional Insured, and Does It Raise Your Premium?

Two PAAs, one answer, and the answer is not the one people expect.

The additional insured pays nothing. They are getting coverage without contributing premium. That asymmetry is the entire deal.

The named insured pays, and it varies enormously. Many policies carry a blanket additional insured endorsement, which automatically extends status to anyone you are required by written contract to add. If you have one, adding a party often costs nothing extra at the point of request. Where a scheduled endorsement is needed, insurers typically charge a fee, and the amount scales with the risk of the work. Construction costs more than consulting. Some carriers charge per certificate, some fold it into the premium at renewal.

We are not publishing a dollar figure, because the numbers circulating for this are unsourced and depend on your carrier, your class code, your state and your contract.

But the fee is not the cost. This is the point of the section. Whatever your broker charges to issue the endorsement is trivial compared to the real price, which is a share of your limits and a claim history that now includes other people’s losses. A carrier charging you $50 to add a general contractor is not the transaction that matters. Handing that contractor equal standing in your $1 million limit is.

Can an Additional Insured Make a Claim?

Yes, within the endorsement’s scope, and this is where sources genuinely disagree, so here is a careful answer.

An additional insured is an insured for qualifying claims. That is the entire purpose of the endorsement: it buys defense and indemnity for liability arising from the named insured’s work, subject to the policy’s conditions and limits. They can tender a claim to the named insured’s insurer and be defended under it.

What they cannot do is act like the policyholder. They cannot change the policy, cannot cancel it, cannot direct claim strategy, and cannot pull the levers the named insured controls. Some sources describe additional insureds as unable to file independently and reliant on the named insured to handle matters; others note the additional insured’s name appears on claim cheques. The practical answer varies by carrier and by form.

Which is exactly why the endorsement, not the certificate, is the document to read. It defines what coverage applies, for which coverage parts, and for what scope of work. Everything else is commentary.

What Is Additional Insured on a COI, and How Do You Actually Get Listed?

The most important sentence on this page: a certificate of insurance is not insurance.

It is an informational summary of a policy. It does not create coverage, modify coverage, or guarantee coverage. If the certificate says you are an additional insured and no endorsement exists on the policy, you are not an additional insured. The certificate is wrong and the policy wins.

So the process that actually works:

1. Put it in the written contract, before work begins. Current forms require a written contract requiring additional insured status. No contract, no coverage.
2. Name the exact legal entity. Not the trading name, not an abbreviation. Misspellings give insurers grounds to deny.
3. Specify the form numbers. CG 20 10 and CG 20 37, and say so by number.
4. Specify the duration for completed operations, ideally aligned to your state’s statute of repose.
5. Demand the endorsement itself, not just the certificate. Ask for the actual endorsement page from the policy.
6. Read it. Check your name, the project address, the contract reference, and the form edition date.
7. Monitor it. Endorsements die at renewal without anyone telling you. Track compliance annually.

Step 5 is the one nearly everybody skips, and it is the only one that matters.

Is There Such a Thing as Additional Insured in Health Insurance?

No, and this search comes up often enough to be worth clearing up.

“Additional insured” is a commercial liability concept. It exists to transfer third-party liability risk between businesses. Health insurance has no equivalent, because health insurance is not liability insurance and there is no third party to defend.

If you are trying to add a person to a health plan, the term you want is dependent or covered family member, and the rules come from your plan and from federal law rather than from an ISO endorsement form. Different product, different vocabulary, no overlap.

The Honest Read: What to Actually Do

If you are the one being added: get the endorsement, not the certificate. Require CG 20 10 and CG 20 37. Check the edition date, because 2013 forms are narrower than 2004 forms, which are narrower than 1985 forms. Require them to maintain it for years after completion, and check annually that it still exists. Do not assume you will be told when it lapses, because you will not be.

If you are the one adding: understand you are dividing your limits, not adding to them. Ask your broker about a per-project aggregate (CG 25 03) if you run multiple jobs against one aggregate. Read what is bundled with the request. And negotiate the scope down to liability arising from your work, which is all any reasonable counterparty actually needs.

Everyone: the form number and the edition date are the deal. Two certificates can look identical and cover completely different things.

And the trap that catches both sides: additional insured status does not cover the additional insured’s own negligence under current forms. If you were negligent yourself, this endorsement was never going to save you, no matter how firmly you demanded it.

Final Word on the Pros and Cons of Additional Insured

Additional insured status is a good and normal part of commercial contracting. It puts risk with the party who controls it, it funds indemnity promises with real money, and it keeps claims off the loss history of the party who did nothing wrong.

It is also routinely oversold and badly understood on both sides. The party being added usually believes they have broader protection than the 2013 forms actually give, and often holds a certificate rather than an endorsement. The party doing the adding usually has not registered that they just gave a stranger equal standing in limits they bought for themselves.

Both problems have the same fix, and it takes ten minutes. Ask for the endorsement. Read the form number. Check the edition date. Count how many other people are already standing inside your limits.

The certificate is marketing. The endorsement is the contract.

FAQs

What are the pros and cons of additional insured status?

It depends which side you are on, because the pros of one party are the cons of the other. Being added means someone else’s insurer defends you without touching your loss history, but with narrow coverage you do not control. Adding someone means winning the contract while dividing your own limits with another claimant.

Why would someone want to be listed as an additional insured?

Because another party’s insurer then defends and indemnifies them for claims arising from that party’s work, which keeps the claim off their own policy and out of their loss history. Defense costs alone often exceed settlements, so this is worth real money even on claims you win.

What are the risks of being an additional insured?

Coverage is narrower than most people assume and has been narrowed four times since 1985. You cannot control the policy, you generally will not be told if it lapses, the endorsement can vanish at renewal, you share limits with others, and a misspelled name or wrong address can void it entirely.

Does adding an additional insured increase premium?

Often it costs the named insured little or nothing at the point of request, especially with a blanket additional insured endorsement already on the policy. Scheduled endorsements usually carry a fee that scales with the risk of the work. The additional insured pays nothing at all.

How much does it cost to add someone as an additional insured?

It varies by carrier, class of work, state and contract, so any single figure would mislead. The more useful answer is that the fee is not the real cost. The real cost is a share of your limits and a loss history that now includes other people’s claims.

What is the difference between additional insured and named insured?

The named insured owns the policy, pays the premium, controls changes and cancellation, and receives full coverage and all notices. An additional insured gets limited coverage tied to the named insured’s work, pays nothing, controls nothing, and generally receives no notices.

Is a certificate holder the same as an additional insured?

No, and the difference is total. A certificate holder is simply the entity that requested a copy of the certificate, and that status confers no coverage rights whatsoever. Only an endorsement on the policy creates additional insured status.

Can an additional insured make a claim?

Yes, for claims within the endorsement’s scope, since that is what the endorsement buys: defense and indemnity for liability arising from the named insured’s work. They cannot change the policy, cancel it, or direct claim strategy, and sources disagree on the mechanics of filing independently.

What is the difference between CG 20 10 and CG 20 37?

CG 20 10 covers the additional insured for the named insured’s ongoing operations, meaning while work is underway. CG 20 37 covers completed operations, meaning claims arising after the work is finished. Most construction claims arise after completion, so you generally need both.

Should my contractor add me as an additional insured?

Yes, and require it in the written contract before work starts. Ask for both CG 20 10 and CG 20 37 by form number, since a certificate showing only CG 20 10 leaves you unprotected the day the contractor drives away, which is when the largest claims tend to appear.

Why do landlords want to be listed as an additional insured?

Because landlords get sued for things tenants do. If a customer slips in a tenant’s restaurant, the plaintiff typically sues both, and the landlord needs a defense even though it did nothing wrong. Additional insured status puts that defense on the tenant’s insurer instead of the landlord’s.

Does additional insured cover my own negligence?

No, not under current forms. The 2004 revision limited coverage to liability caused in whole or in part by the named insured’s acts or omissions, which removed cover for the additional insured’s own negligence. Several states also prohibit that transfer by statute in construction contracts.

Will I be told if the policy is cancelled?

Generally no, and this is a widespread misconception. The certificate may state 30 days notice of cancellation, but the ACORD 25 form carries a disclaimer that this imposes no obligation on the insurer. Only the first named insured reliably gets notice, so require a specific notice endorsement if it matters.

Does adding an additional insured give me more coverage?

No. It divides the coverage you already have. Your limits do not increase because more parties are insured under them, so every additional insured is another party drawing from the same pot. A per-project aggregate endorsement, CG 25 03, can stop one project’s claims eroding your whole aggregate.

Is there additional insured in health insurance?

No. Additional insured is a commercial liability concept for transferring third-party risk between businesses, and health insurance is not liability insurance. To add someone to a health plan, the term is dependent or covered family member, governed by the plan and federal law.

About the Author

The InsuranceGuidances Editorial Team writes and fact-checks insurance guides, led by an editor with 16 years of experience in banking and insurance. Our standing rule is zero fabrication: every figure and form reference on this page traces to a named source, and we name the trade-offs rather than the selling points. This article is general information and not legal or financial advice. Reviewed July 2026.

Sources

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LegalClarity, CG 20 10 Endorsement: Additional Insured Coverage Explained: https://legalclarity.org/cg-20-10-endorsement-additional-insured-coverage-explained/

LegalClarity, CG 20 37: Completed Operations Additional Insured Coverage: https://legalclarity.org/cg-20-37-completed-operations-additional-insured-coverage/

American Traffic Safety Services Association, Contractual Risk Transfer and the Additional Insured Clause: https://www.atssa.com/news/contractual-risk-transfer-and-the-additional-insured-clause/

unifi.ai, Additional Insured Endorsement Explained: CG 20 10 vs CG 20 37: https://unifi.ai/blog/additional-insured-endorsement-explained

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