How much does it cost to add an additional insured?

What insurers charge to add an additional insured

For a single name on a general liability policy, the charge is usually small or zero. NerdWallet says most insurance companies let you add an additional insured for free, and Insureon describes the premium increase, when there is one, as relatively nominal compared with the cost of the policy itself.

Online insurers built for contractors and event vendors compete on this. ERGO NEXT notes that some insurers make policyholders contact an agent or pay a fee to add one. The table shows what several insurers publish.

Scheduled or blanket: which costs less

A scheduled endorsement names each additional insured individually, so every new client means another request to your insurer and, with some carriers, another fee. A blanket endorsement automatically extends additional insured status to anyone you have agreed in a written contract to cover.

Progressive Commercial says blanket endorsements usually cost extra, often as a one-time flat fee for the policy term, which can be cheaper than paying for several individual endorsements during the year. It also warns that blanket endorsements often cover only ongoing operations, not completed work, and that some clients want to be named directly on a scheduled endorsement anyway.

Either way, you still issue a certificate of insurance showing the coverage, and a blanket endorsement applies only when the contract requires it in writing.

Contract wording that can raise the price

The words “additional insured” rarely travel alone in a contract. Each extra requirement may need its own endorsement, and that is where charges tend to appear.

• Completed operations: the standard ISO form CG 20 10 covers the additional insured while you are working, and CG 20 37 extends coverage to claims after the job is done. Construction contracts often require both.
• Primary and noncontributory: your policy pays before the additional insured’s own insurance and does not seek a share from it.
• Waiver of subrogation: your insurer gives up its right to recover from the client after paying a claim. It is often bundled on liability and auto policies but priced separately on workers’ comp.
• Auto and umbrella policies: some contracts ask for additional insured status on commercial auto and umbrella coverage, not just general liability. The Hartford’s Business Auto Broad Form includes additional insured by written contract, primary and noncontributory wording and a waiver of subrogation at no extra charge.
• Specific form numbers: contracts that name forms such as CG 20 10 and CG 20 37 leave less room for a narrower substitute, so check your policy matches.

Workers’ comp waivers of subrogation cost the most

This is the request most likely to cost real money, because it is priced as a percentage of premium rather than a flat fee. Tennessee’s insurance department, citing NCCI’s Basic Manual, says insurers in the voluntary market set the charge from their own evaluation of the exposure, while assigned risk policies pay 5% of the manual premium for the work covered, with a $250 minimum per waiver.

As an illustration, if the manual premium tied to a job is $3,000, a 5% charge would be $150, so a $250 minimum would apply instead. If you work for many general contractors, a blanket waiver priced once per policy can cost less than naming each one.

Costs that don’t show up on the invoice

Insurance Canopy points out that the more additional insureds you name, the more your coverage limits are shared. If a client is sued over your work and turns the claim over to your insurer, defense and settlement costs come out of the same limits that protect your business, and like any claim on your policy it can affect your pricing at renewal.

That is one reason larger clients ask for higher limits or an umbrella as well. By contrast, Insureon notes that naming a loss payee — typically a lender or lessor on property or vehicle coverage — generally costs nothing extra, because it creates no additional risk.

How to meet the requirement without overpaying

A few steps keep the cost close to zero and avoid a rejected certificate on the first day of the job.

A broker such as Florin can check what your current policies already include and compare insurers if the charges add up.

• Send the insurance section of the contract to your agent or insurer before you sign, not after.
• Ask whether your policy already includes blanket additional insured, primary and noncontributory and waiver of subrogation wording.
• If you sign several contracts a year, compare one blanket endorsement fee against per-name charges.
• For workers’ comp waivers, ask for the percentage and the minimum, and whether a blanket waiver is cheaper.
• Ask the client to drop requirements that don’t fit the work, such as completed operations for a one-day event.
• Keep copies of the endorsements themselves; PINS Advantage notes that the additional insured box on an ACORD 25 certificate does not confirm the endorsement exists.