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Insurance policies provide you with an option to add an “additional insured” on your general liability policy. But what is an additional insured and what does facilitating an additional insured really mean for my business?

As the name suggests, “additional insured” represents individuals that are not the policyholders, yet they can receive coverage under the policy. In other words, additional insured is anyone other than the policyholder that enjoys the benefits of coverage under the policy.

Typically, in a small business, it serves as an effective tool for risk management by providing the additional insured with specific coverage from the associated policy.

Depending on industry requirements, you may have to add new clients, vendors or partners as an “additional insured”. Take for example a vendor trying to work with a large company. The large company may require that they are added as an additional insured on the vendor’s policy. This would protect the large company in case any insured action from the vendor resulted in a lawsuit.

However, the protection that the additional insured enjoys (whether an individual or a group) may be limited compared to the policyholder. This coverage offered to the additional insured will vary depending on the terms and specifications of each contract. Your policy gives you the flexibility to get coverage for a one-time event associated with the additional insured or for the lifetime of the policy. There is also the ease of putting down an “additional insured” to an existing policy. The best way to go about this is to review your policy, perhaps with your insurance agent and to follow the specific guideline/ procedures your insurer associates with handling “additional insured” parties.

If you’re still unsure, our team is happy to go over the available options with you.

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About Zensurance

Zensurance is Canada’s leading online commercial insurance broker. We offer a full range of insurance products to small businesses, with a particular focus on digitizing businesses and technology startups. We understand what it is to work with new technology, and know the most common risks of which you should be aware. Based on that (and a lot of analytics), we recommend the ideal insurance coverage for your business.

If you have specific questions about your business insurance, please visit us at www.zensurance.ca or email us at info@zensurance.com and we will find the answers for you.

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