The commercial general liability (CGL) coverage form has a “who is an insured” section in which it describes “an insured” to whom the provisions of the CGL form apply.
However, that section does not deal with entities known as “additional insureds,” those that are added as insureds to the CGL form by way of endorsements.
In today's business world, a company is often asked (or required) to put another entity on its commercial general liability coverage form as an additional insured. This is usually done by issuing an endorsement to the CGL form, adding the other entity as an insured. The endorsement can be fine-tuned to a specific entity or can be a blanket additional insured endorsement. Furthermore, the wording of the additional insured endorsement can be simple or more complex.
|Legal and financial consequences
But regardless of the length or format of an additional insured endorsement, the insured and the insurer should realize that a decision to make some entity an additional insured on a general liability policy should not be dismissed as just a simple business decision that has no real consequences. There can be legal and financial consequences arising from that decision.
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