What are "additional insured" endorsements?

"Additional insured" endorsements are provisions in an insurance policy that extend coverage to other parties beyond the primary insured, typically as a requirement outlined in contracts. This means that when a primary insured party has a contract with another entity—such as a contractor, vendor, or lessor—they may be required to add that entity as an additional insured on their policy. This ensures that the additional insured party is protected under the primary insured's policy for specific liabilities, which is particularly important in situations where different parties are working together on a project or where liability may arise.

By adding an additional insured endorsement, the primary insured allows the other party to benefit from the coverage in situations that could lead to claims against them. This is common in construction contracts, rental agreements, and service contracts where various stakeholders need to share risk. The additional insured will generally be covered only for claims arising from the actions of the primary insured, thus offering a layer of protection for both parties involved.

The other choices do not provide an accurate description of additional insured endorsements. For instance, limiting coverage to the primary insured contradicts the purpose of these endorsements, which aim to broaden coverage rather than restrict it. Similarly, defining policyholder rights or providing exceptions to coverage terms does not capture the essence of