Why Property Managers need to use Additional Insured Policies
Many Property Managers look over the importance of Additional Insured Endorsements when, in fact, they bring many benefits. As a property manager, you can save thousands of dollars in insurance costs by requesting to be an additional insured.
To benefit from an additional insured endorsement, you need to understand what being an additional insured means and what coverage you have when you are an additional insured.
What is an Additional Insured?
An additional insured is somebody who benefits from the coverage of another party’s insurance coverage. This coverage includes the ability to make claims under the insurance policy.
Anybody can request to be an additional insured on an insurance policy. This means that you can request to be an additional insured on a vendor’s insurance policy when they are working with you.
You can add an additional insured to an existing insurance policy through an endorsement. According to the National Association of Insurance Commissioners, the standard-setting and regulatory organization for insurance regulators in the US, “an insurance endorsement/rider is an amendment to an existing insurance contract that changes the terms of the original policy.” So, when you request to be an additional insured on a vendor’s policy, they are changing their insurance to assure you receive coverage.
It is important to note that a small cost comes with adding an additional insured to an insurance policy. According to Investopedia, a business & economy organization with the goal of simplifying financial information for readers, “the cost of adding an additional insured is typically low, compared to the cost of the premium.” Since the cost is low, it is a great option for parties who only need insurance coverage for the short time they are working with a vendor who already has coverage.
What Coverage does an Additional Insured have?
When you are an additional insured, you have full coverage under the insurance policy. This means you have the right to file a claim.
Here is an example to help you understand. Imagine you are working with a third-party vendor to do some repairs on your property. The repairs are on the roof of your building, so the vendor has to put up scaffolding. The scaffolding imposes a fall risk, but you do not need to buy insurance for this since it is not permanent.
Luckily, the vendor you are working with has insurance to protect against any accidents. Since he is working on your property; you can request to be an additional insured on the policy. By doing this, you receive coverage under the policy and can make a claim if anybody sustains an injury on your property because of the scaffolding.
How can I keep track of my Insurance Policies?
You can see an additional insured relationship through a Certificate of Insurance (COI). The best way to keep up with your insurance policies and the policies that you are an additional insured on is with certificate tracking and compliance management software.
This software allows you to upload your insurance certificates and request vendors to upload theirs to assure everybody is in compliance. If this is something you think your property management business would benefit from, schedule a free product demo today!