Last Updated: July 15, 2024
One of the benefits of having a Food Liability Insurance Program (FLIP) policy is the ability to add an unlimited number of additional insureds for free.
The policy application gives you an opportunity to add additional insureds before you finish checking out. But did you know you can still add them at any time afterward? Yup, it’s true!
Learn more about additional insureds and how you can add them to your policy from your user dashboard today. Plus, find out who should and shouldn’t be one of your additional insureds.
How to Add Additional Insureds to Your Certificate of Insurance
Adding additional insureds with FLIP is easy as pie—just follow these three simple steps:
- Log in to your FLIP user dashboard
- Click “Add Additional Insured”
- Fill out the information about the person/organization you are adding as an additional insured
What Is an Additional Insured Endorsement?
An additional insured endorsement is a way of adding another person or business to your policy.
Only you as the policyholder have the ability to add additional insureds—they cannot add themselves or other parties.
Additional insureds are not protected by your policy if they make a mistake. They are only protected from your liability, so if they are sued because of your negligence your policy can financially shield them from the cost of that claim.
Let’s take a look at a couple of examples of how the additional insured endorsement works.
Example of Additional Insured Receiving Coverage
Imagine you’re a personal chef who rents a commercial kitchen to conduct one-on-one cooking classes. In order to rent this space, the commercial kitchen requires you to add them to your general liability policy as an additional insured.
One day, while you’re teaching a class, your student burns themselves on the gas stove. Because of their injuries, this student files a personal injury claim to help them cover their medical expenses. However, since the incident occurred in the commercial kitchen, the student decides to include them in the suit as well.
Could they receive protection from your policy? Yes!
Since you added them to your policy as an additional insured (and because they weren’t responsible for the incident), they could be shielded from your negligence under the terms of this policy.
Example of Additional Insured Not Receiving Coverage
Let’s say that your student burned themselves on the gas stove after it malfunctioned and exploded due to a lack of maintenance. The student decides to sue the commercial kitchen for the personal injuries they suffered.
Could the commercial kitchen receive protection from your policy? No.
Because the commercial kitchen owners are responsible for maintaining their cooking equipment, it was their negligence that caused this incident. Your policy only protects them from your negligence, so they would need their own business liability policy to shield their finances from this lawsuit.
Why Is an Additional Insured Important?
It’s not uncommon for individuals or organizations to ask you for additional insured status before they will do business with you. They want to make sure that they’re protected in case you make a mistake that leads to a claim.
Adding parties like landlords and festival organizers to your policy when they request it can open up business and vending opportunities for you.
Chances are, you will need to add multiple parties to your policy throughout the course of doing business, which is why FLIP makes it easy with free and unlimited additional insureds.
Who Should Be Listed as an Additional Insured?
Typically, you should only add an additional insured to your policy when it’s requested by the individual or organization themselves.
Parties that might request additional insured status include:
- A landlord, if you’re renting commercial property
- A business that hires you as an independent contractor
- An event, convention, farmers market, venue, or festival
But just because you can add these groups doesn’t necessarily mean that you should.
For example, just because you’re renting property doesn’t mean you have to automatically add your landlord as an additional insured. Unless they request it, they don’t need to appear anywhere on your policy.
The same is true for businesses that hire you as an independent contractor. Your policy follows you and protects you regardless of where you work or how many locations you work at.
Having a business relationship with a person or organization does not require you to give them additional insured status.
We don’t need to know the details of your business relationships in order for your policy to be valid, especially since so many of these relationships are temporary.
However, once you add them to your policy, they’ll be permanently reflected on your policy.
Who Should Not Be Added as an Additional Insured?
If anyone else asks you to add them as an additional insured besides the three groups listed in the previous section, be careful before you include them on your policy.
In fact, there are certain people you will never want to add as additional insureds, even if they ask about it. These include:
- Family members who help you out at your business
- Friends who provide similar services for your business
- Business associates who work at the same location
- Yourself or your employees
- Other businesses that you own
These types of individuals don’t qualify for additional insured status, and if they are named in a claim, your policy won’t cover them.
Often, these people request that you add them because they misunderstand how an additional insured works. They think they’ll be covered by your insurance if they make a mistake. But remember, additional insureds are only protected for mistakes you make.
To be covered for their own mistakes, these parties will need their own insurance policy.
What Are the Risks of Adding Additional Insureds?
It’s important to remember that when it comes to additional insureds, less is more.
While having a FLIP policy means you can add any number of additional insureds to your policy, that doesn’t mean it’s a good idea to add other parties without considerable thought.
When another individual or business asks you for additional insured status, weigh the following risks with whatever benefits you might receive by adding them.
Eroding Limits
By adding third parties to your policy, you are opening up your limits to those parties as well.
If one of your additional insureds files a claim with your insurance and your insurer pays out, that erodes your aggregate (total) policy limit for both you and any other additional insureds you have.
Waiver of Subrogation Endorsement
In many cases, parties you add as additional insureds will also request a Waiver of Subrogation when you add them to your policy.
This means that your insurer will not be able to go after a specific person or organization to recoup costs if that party was responsible for damages but received a payout from your insurer.
This includes medical payments, repairs, and even your deductible.
Primary & Non-Contributory Endorsement
Another common request from additional insureds is to add a Primary and Non-contributory Endorsement to your policy.
This endorsement states that if other insurance in place could cover a claim, your policy will respond first and not seek any contributions from any of the other insurance policies available.
When your additional insured requests this, it gives them added protection in the event of a claim and shifts more of the responsibility to you, the insured.
Add Additional Insureds to Your FLIP Policy Today!
Don’t have a FLIP policy yet? No problem! Purchase your policy in 10 minutes or less and add additional insureds during checkout.
