Published May 06, 2020 • 2 minute read
A blanket additional insured endorsement is a form of additional insured language through which a named insured can extend their coverage to multiple third parties without having to specifically name or request additional insured status for each one.
Why Do Businesses Choose Blanket Additional Insured Endorsements?
Requesting additional insured status, from a contractor for example, is a common means of securing an added layer of protection. Should an incident result from contractor negligence, the additional insured language confirms the responsible party will respond to the claim.
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Making this policy addition requires formal submissions from contractors or vendors. This is fairly straightforward and manageable when conducted for one, or a handful of entities. Some businesses, however, work with hundreds of companies at any given time. When all request inclusion as an additional insured, the process can become overwhelming, and mistakes can happen very easily.
Errors, such as missing documents or incorrect information, can prevent a company from obtaining additional insured status—which could leave it open to costly liabilities unapparent until it's too late.
Blanket endorsements help businesses reduce the likelihood of making such mistakes by including policy language that extends additional insured status to any entity with which they have a contractual agreement to perform a job—bypassing many traditional steps.
Important Considerations For Blanket Additional Insured Endorsements
The broad, time-saving nature of blanket endorsements makes them a convenient choice for vendors, contractors, and even subcontractors. They provide peace of mind, and instill confidence.
This type of endorsement, however, also has several limitations all parties should be aware of, regarding:
Ambiguous Language: Standard language established in 1997 has not had much opportunity to be tested in court, resulting in a lack of clarity surrounding certain aspects of these endorsements. Without legal precedent, it's critical all parties carefully review the endorsement before entering into an agreement.
Completed Operations: In addition to ambiguities, commonly used language for blanket endorsements lacks coverage for completed operations—a significant gap for many types of projects.
Notices of Cancellation: Securing notices of cancellation is an important step for companies to take to limit risk. Doing so easily, however, requires inclusion as an additional insured under the policy in question. This is more difficult with blanket endorsements, since they do not require the named insured to list additional insureds.
Contracts Required: The specifics of a blanket endorsement will depend on the stipulations of each policy, but most require a signed contract between the two parties. As such, companies should always make sure to keep such documentation, as it may be required to confirm additional insured status in the event of a claim.
How BCS Can Help
BCS offers an app-based solution with features including certificate of insurance tracking and document management. Designed and built by industry experts, BCS makes keeping track of your insurance compliance easy—no matter how many parties you work with or what type of endorsement you use.