Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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hard hats

As you may suspect or already be quite aware of, commercial insurance is quite a bit more involved than personal lines for the most part.

Most businesses are required to work with at least one other company in order to thrive. Simply being in business puts you and any of your business partners at risk for liability claims arising out of any number of potential negligent actions (or products).

Having a commercial general liability policy is the first step to covering your ass(ets) when operating any business.

And the necessity of business to business relationships leads to the need for two very common commercial insurance endorsements, which include the “additional insured” and the “blanket additional insured.”

Let’s look at an example of where both may be necessary.

Additional Insured Endorsement:

Any company that operates their business in a building owned by another entity would need to endorse their commercial general liability policy to add the company who actually owns the property as an “additional insured.”

If someone slips and falls in the area leased by the insured, they would have the right to sue the insured and the company who owns the building. The business owner’s policy would respond by defending the property owners in court against any lawsuit.

Depending on which insurer you purchase a policy from, endorsing an additional insured may be free (up to a certain number) or quite expensive. For perspective, contractor’s insurance policies will likely charge “per additional insured.”

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Blanket Additional Insured Endorsement:

There are some businesses that require so many additional insured due to their day-to-day operations that a “blanket additional insured endorsement” is the only effective way to manage it.

The key benefit to the additional insured blanket endorsement is that it’s not necessary to notify the insurer every time you would like to add coverage for a new company.

The insurer simply adds the endorsement to your policy and charges you one flat rate. You may have as many additional insured as necessary for the normal operation of your business.

This coverage endorsement is particularly valuable to contractors who work with several other contractors at numerous job sites. Instead of hiring an employee simply to stay in touch with the insurance company on a constant basis, you pay the fee and go on about your business.

Deciding which type of commercial general liability policy suits your company best, based on coverage and overall insurance premium, may require the knowledge of a local independent insurance agent.

Such agents are capable of shopping your unique business coverage needs with several insurers at once.