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One of the benefits of Full Frame Insurance is the ability to add additional insureds for a really affordable price. However, for many of our Full Frame customers, adding that extra $15 expense isn't necessary.
Why? Well, the answer to that begins with an understanding of what, exactly, an additional insured is.
Okay...Well, What Is It, Then?
For many people, their understanding of insurance and how it functions is based on what they know from personal experience. For that reason, I'll try to use auto insurance as a way to help you understand.
With auto insurance, you're usually able to add multiple drivers to a policy. Often, this is a spouse or children (of driving age, of course). For each additional driver, the premium goes up.
Sounds kind of like our additional insureds, right?
But, even though they sound similar, they're different.
On an auto policy, the additional drivers are actually covered under the policy itself. So, if your son, for example, drives the car into a tree, the policy should cover the damages. With an additional insured, they aren't covered if they make a mistake. They're covered if you make a mistake.
Here's an example: let's say you're a photographer and you set up a photo shoot at a venue such as a wedding hall. The wedding hall requires that you add them to your policy as an additional insured. While you're photographing a bride, her new mother-in-law stumbles over your camera case and tears a tendon in her ankle. Because of her injuries, the mother-in-law decides to file a personal injury claim.
Since the incident occurred at the wedding hall, the mother-in-law decides to include the wedding hall in the suit, hoping to get more money. But, because you added the wedding hall as an additional insured (and because the wedding hall was not responsible for the incident), they should be protected under the terms of your policy.
Now, here's an example where the wedding hall wouldn't be covered under your policy, even though they are named as an additional insured: The bride arrives at the wedding hall and, while walking up a carpeted flight of stairs, she trips on a tear in the carpet and breaks her arm while catching her fall. Because the wedding hall owners are at fault (they should have fixed that carpet!), your policy doesn't protect them. They would need their own business liability policy to protect their finances from a lawsuit.
So When Should I Add an Additional Insured?
The short answer to this question is: only when it's requested.
But here's a little bit of a longer explanation. Typically only certain people or business organizations will ever request that you add them as an additional insured. These include:
- A landlord, if you're renting commercial property
- A business that hires you as an independent contractor
- A national park, state park, or regional park
- An event, convention, or festival, wedding venue, or school
But, just because you CAN add these groups doesn't meet you should. Again, only add them if they request it.
For example, just because you're renting a property or space doesn't mean you must automatically add your landlord. Again, unless he or she requests it, your landlord doesn't need to appear anywhere on your policy. Same with businesses who hire you as an independent contractor. This is because your policy follows you, and it protects you regardless of where you work.
Basically, just because you have a business relationship with someone does not require that you add them to your policy. If your lease with a landlord ends and you move locations, the policy will still protect you at the new spot. If you contract with multiple businesses, you're covered by your policy at each of their locations.
To have the policy be valid, we don't need to know the details of your business relationships, especially since so many of these are of a temporary nature, but once added, they will be permanently reflected on your policy.
That's why we also recommend, when purchasing your policy, that you don't necessarily list your address as the place where you do business. Instead, you should put either your home or mailing address, since these are likely more permanent.
So, Is There Anyone I Shouldn't Add 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 spend the money to 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 with your photography services
- Friends who provide similar services
- Business associates who work at the same location
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. So save yourself the $15 or $30 expense, otherwise you're paying for something that doesn't offer any benefit.
Often, these people request that you add them because they misunderstand how an additional insured works. They think they'll be covered if they make an mistake. But remember, additional insureds are only protected for mistakes you make. To be covered for their own mistakes, they'll need their own insurance policy.
But What About Where It Says "Unlimited" Additional Insureds? If It's Unlimited, Why Can't I Add 10 People?
Let's break down the logic here. First of all, insurance is a business.
Unlimited additional insureds isn't a loophole that lets you add a bunch of people to your policy so you can split the cost of the premium between you. Let me explain with a little math.
If you add 10 of your business associates as additional insureds, you have a $114 premium ($99 + $15 for each additional insureds). Including you, that's 11 people contributing towards that premium, which means each person is only paying $10.36 per year for really high quality insurance coverage.
Would you ever charge so little for your services? It just doesn't make business sense, and if you'd never do it, why would we?
For our second point, remember that an additional insured isn't protected for the things they do. They're protected for the things you do that could affect them in a lawsuit.
If you really think about it, does it make sense that for only $114, a policy would cover the actions of multiple people? The more people there are on a policy, the more risk there is that one of them will make a mistake. And the more risk there is, the more your insurance will cost, which is why a Full Frame policy only covers your actions.
In order to keep our insurance affordable, but still offer fantastic protections and competitive limits, we have to restrict how many people's liability we cover.
One Final Word
Hopefully we've now cleared up your misconceptions about additional insureds and how they work. However, if you still have questions or concerns, we invite you to call in and talk to one of our customer service representatives at (888) 568-0548. We want to make sure you truly understand your policy, what it covers, and how it works.