The importance of not adding an Additional Insured to a Professional Liability Insurance Policy.

As a professional, you understand the importance of protecting yourself and your business from risk. One of the ways you can do this is by purchasing professional liability insurance, which provides coverage for claims made against you or your business for professional errors or omissions. However, it’s important to understand that adding an Additional Insured to your professional liability insurance policy can have significant consequences.

An Additional Insured is someone who is added to your insurance policy, typically at the request of a client or customer, in order to be covered under your insurance policy. While adding an Additional Insured to a commercial insurance policy may be appropriate in certain situations, it’s generally not recommended for professional liability insurance policies.

The reason for this is that professional liability insurance policies are designed to protect the policyholder from claims arising out of their own professional services. Adding an Additional Insured to your professional liability insurance policy could potentially increase your risk exposure by extending coverage to someone who is not directly involved in the delivery of your professional services.

For example, let’s say you’re an architect and you’ve been hired by a client to design a new office building. The client may ask you to add them as an Additional Insured to your professional liability insurance policy. While this may seem like a reasonable request, it’s important to understand that if the client is added as an Additional Insured and then makes a claim against your policy, the claim will be paid out of your policy limits, potentially leaving you with less coverage for claims arising out of your own professional services.

Additionally, adding an Additional Insured to your professional liability insurance policy can also result in higher premiums, as the insurance company will need to assess the additional risk exposure.

In contrast, adding an Additional Insured to a commercial insurance policy, such as general liability insurance, may be appropriate in certain situations. Commercial insurance policies are designed to protect the policyholder from claims arising out of their business operations, which may involve third parties who are not directly involved in the delivery of professional services.

For example, let’s say you’re an architect and you’ve hired a contractor to perform construction work on a project. The contractor may ask to be added as an Additional Insured to your general liability insurance policy in order to protect themselves from claims arising out of their work on the project. In this situation, adding the contractor as an Additional Insured may be appropriate, as it would extend coverage to someone who is directly involved in the business operations.

In conclusion, as a white-collar professional, it’s important to carefully consider the implications of adding an Additional Insured to your insurance policies. While adding an Additional Insured to a commercial insurance policy may be appropriate in certain situations, it’s generally not recommended for professional liability insurance policies. By understanding the risks and benefits of adding an Additional Insured, you can make informed decisions about how to best protect yourself and your business from risk.