Naming someone as additional insured does not make your policy theirs.
A general or an owner asks to be added to your liability policy before you start. It gives them cover for their share of a claim that comes out of your work, and nothing beyond that. The gap between what the contract asks for and what the paper actually delivers is where the argument happens.
Build the contractor file Read the short answer firstCover follows what you did.
Their own negligence stays theirs.
A certificate is not the policy.
What does additional insured status actually give someone?
Cover for their part in a claim that arises out of your work, and only that. The Canadian Construction Documents Committee puts it plainly: the negligent acts of an additional insured are covered, “provided such negligent acts are related to the Named Insured’s contract”.
The limit is the one you already bought. Adding a party does not add money, it shares your money. And it stops at their own negligence. If the owner is sued for something they did on their own, with no link to your work, your policy is not the one that answers.
Most insurers issue a certificate of insurance instead of a formal endorsement, because it is faster and cheaper, even though the policy usually says it can only be changed by endorsement. The certificate then says on its own face that it does not amend the policy. CCDC’s advice is to know what the contract requires, compare it with what the insurance representative provides, and question any difference. Read CCDC Bulletin 4 on additional insureds (opens in a new tab).
Four things to settle before you sign.
What the clause actually asks for
Some ask for additional insured status. Some ask for a waiver of subrogation with it. Some ask to be named for six years after the work is finished. Read the words, not the summary someone sent you.
Endorsement or certificate
If all you have is a certificate, ask your broker whether a blanket additional insured wording sits behind it. That wording is what makes the certificate mean something.
How long it runs
CCDC 2 asks for owner and consultant cover for six years after the work is done. Cover that ends the day you finish does not meet that.
Whether your limit still fits
You share your limit with everyone you add. A limit that suited one company can look thin once three parties sit on it.
Three jobs, three arguments.
The certificate that changed nothing
A framer sent the general a certificate showing the owner as additional insured. The policy itself was never endorsed. When the claim came, the insurer covered the framer and argued about the owner.
The claim that was not about the trade
A visitor tripped on a stair the owner had built himself, months before the trade arrived. The owner turned to the trade’s policy. Nothing about it arose out of the trade’s work, so it did not respond.
The limit that ran out early
A small electrical firm had added four parties over two years. One serious claim used the limit for all of them at once, and the firm ended up sharing the money it had bought for itself.
The questions trades ask about this.
Does adding someone cost me more?
Sometimes a small charge, often nothing at all. The real cost is that they now share your limit.
Can I just send a certificate?
You can, and most people do. Ask whether your policy carries a blanket additional insured wording, because that is what stands behind the certificate.
If the owner is sued, does my policy pay?
Only where the claim arises out of your work. A claim about something the owner did on their own is not yours to answer.
The contract wants six years after completion. Is that normal?
Yes on CCDC 2 jobs. It is a completed operations question, so check that your cover reaches that far.
They want to be named on my tools policy too.
Ask why. Additional insured status belongs on liability cover. On property cover, being named usually means something quite different.
Two that sit next to this one: what a clearance letter and a certificate each prove, and what a project wrap-up does and does not do for your own company.
Not the question you came with? Send it through the short contact form and we will answer the one you actually have.
Know what you are signing before the job starts.
Send us the insurance clause and your current certificate. We will tell you what matches and what does not.