The short answer
Additional insured status extends another party’s liability policy to you. It usually comes from a contract requiring a subcontractor, tenant, or vendor to name you on its insurance. When it applies, someone else’s insurer may have to defend you and pay on your behalf.
Why it matters
Additional insured coverage can move defense costs and settlements off your own policy and your own loss history. In construction, leasing, and vendor relationships, it is often the most valuable insurance you never paid for, but only if the paperwork actually delivers it.
Where it fits in your case
When you sign a contract with insurance requirements, and again when you are sued over work, premises, or products connected to another party.
What to expect
The endorsement controls. Your status depends on the wording of the additional insured endorsement in the other party’s policy, not just on what your contract required. Many endorsements cover only injury caused, in whole or in part, by the named insured’s work, and may separate ongoing work from completed work.
Certificates are not coverage. A certificate of insurance usually states that it confers no rights. The endorsement is what matters.
Defense turns on the allegations. As with any liability coverage, whether the insurer must defend you depends largely on what the lawsuit alleges.
Choosing which insurer responds. In some situations, Illinois lets an insured with more than one applicable policy choose which insurer defends, which can protect your own policy.
Order of payment. Whether the other party’s policy pays before yours depends on the contract and the policies’ “other insurance” language, including any primary and noncontributory wording.
What to do now
Ask for a copy of the endorsement itself, not just a certificate.
Check that the endorsement covers both ongoing and completed work if your contract requires it.
When you are sued, send the lawsuit in writing to the other party’s insurer as well as your own.
Keep the underlying contract available. Insurers will ask for it.
What we need from you
The contract with its insurance requirements, any certificates and endorsements you received, and the lawsuit or claim.
Common misconceptions
“We have a certificate, so we’re covered.” A certificate is evidence of a policy, not proof of your coverage under it.
“It only helps if the other party was at fault.” Fault matters to some endorsements, but the lawsuit’s allegations often decide the defense question first.