What does Additional Insured mean?
What does it mean when your Motor Carrier asks to be listed on your insurance policy as Additional Insured?
In our world of Expediting this is usually requested on the Commercial Auto policy.
When an Owner Operator lists a Motor Carrier as â€œAdditional Insuredâ€, it means the Motor Carrier has certain direct â€œrightsâ€ to that policy. For example, it allows the Motor Carrier to have first dollar Defense costs paid up front in the event they are drawn into a legal battle.
It is a broader way to offer benefits versus the traditional way of transferring risk through indemnity provisions.
It also allows the Motor Carrier to turn in a claim on the policy.
Many, but not all Insurance Providers also send the Motor Carrier who is Additional Insured a notice of cancellation via snail mail.
This is not to be confused with IMMEDIATE email notice that an Agency may choose to offer as one of their services.
For example, Progressive charges $20 for a Motor Carrier to be ADDED to an Owner Opâ€™s policy, but this does NOT include immediate notification of cancel by them via emailâ€¦thatâ€™s an Agencyâ€™s choice to offer that service.
(I point this out because there was an error on an E.O. thread where someone thought that for $20 Progressive would email an immediate notice of cancelâ€¦they do not.)
Fees for the Additional Insured Endorsement also vary by Insurance Provider, with some charging $50 or $75 per Additional Insured added to a policy.
Without this Endorsement, the Motor Carrier is â€œout of the loopâ€ on a claim, with no rights of inquiry on a claim or the Owner Operatorâ€™s policy itself.