Additional Insured vs. Named Insured
Overview
1) Producing the Job Yourself
Your company is the Named Insured
Your client and all vendors are additional insured under your policies (you name them)
Your subcontractors should name you and your client as additional insured under their policies
2) Co- Producing the Job
Each production company is a Named Insured under their own policies
Each production company should name the vendors they have contracts with as additional insureds, Each company should name the client as an additional insured
The subcontractors should name each company and the client as an additional insured under their policies
3) Wrap-Up Insurance (Agency or Client Insurance)
The Client or Agency and your company are Named Insureds
All vendors are additional insured under this insurance (you name them)
Your subcontractors should name you and the client or agency as additional insured under their policies
4) You being hired by a Production Company for Production Services
You should name the production company hiring you and the client as an additional insured under your policies
In-Depth Summary
The question of whether to be a named insured, an additional insured, an additional named insured or a co-insured gets talked about on a daily basis by production folks in the course of securing locations, renting equipment, dealing with agencies/clients and securing coverage for their own companies under wrap-up insurance programs. In order to take some of the confusion out of this subject matter I decided to write this handout.
When a production company purchases its own commercial general liability policy their company will be the named insured on that policy. It is the named insured who gets to make changes to the level of coverage, who is afforded the coverage benefits under the policy and who makes the premium payments and who is entitled to the return premiums if any. If given a preference most companies would want named insured status on a liability policy because they are afforded protection for their own acts of negligence subject to the policy limit, terms, conditions and exclusions. If a member of the public trips over a cable on location that was improperly laid down by the production company it would be the commercial general liability policy of the production company that would provide their defense in the event of a claim as well as provide the payment of the settlement if they were found to be liable for the accident.
Additional insured status does not afford the entity given additional insured status liability protection for its own acts of negligence. The additional insured is only afforded liability protection should they find themselves involved in a lawsuit arising from the acts of another (the named insured). In the instance of a cable improperly laid on location, a production company being given additional insured status on a client’s policy, would not be afford the protection it would need since it would be the improper security precautions of their own crew that caused the accident.
Contrast the above example with that of a location asking to be named as an additional insured on the production company's liability policy. If the fact pattern remains the same and it is the production company's improper laying of the cable on the ground that causes the accident, the location's additional insured status on the production company's liability policy would provide insurance protection to the location as they would not have done anything to contribute to the accident. Change the fact pattern one more time and make it an existing pot hole on the location's property that was the proximate cause of the accident and the additional insured status would not benefit the location from a claimant who tripped on the pot hole. The location would need to file the claim from the person who tripped on the pot hole on their own liability policy because of their failure to maintain their property.
When does it make sense to grant another company additional insured status: Most commercial general liability policies issued to production companies allow the production company to name equipment vendors, locations, and municipalities as additional insureds. Some carriers even allow a production company to name the client, ad agency, payroll service and record label as an additional insured. The safest approach is to ask your carrier which types of businesses can be added as an additional insured without having to endorse the policy. NOTE WHEN WORKING UNDER A WRAP-UP INSURANCE PROGRAM YOU WOULD NEVER LIST THE AD AGENCY, CLIENT OR RECORD LABEL AS AN ADDITIONAL INSURED ON YOUR OWN LIABILITY POLICY.
What the above additional insured categories have in common is they either hired the production company for a service or they are providing the production company with equipment/locations and are not actively involved in the production process themselves. It is generally not a good idea to name an entity as an additional insured on the production company's liability policy when that entity is being hired for their own expertise and/or that entity requires a license to perform their profession.
When working under a wrap-up insurance program the production company must insist on being a named insured or an additional named insured. An additional named insured is a party who is entitled to the benefits of the liability policy for their own acts of negligence subject to policy limits, terms, conditions and exclusions but they are not typically responsible for premium payments nor can they make changes to the policy. Sometimes the words co-insured appears but I am not aware of any liability policy where those words appear.
The next question is should I issue a certificate of insurance to my vendors? It is in the production company's best interest to not extend additional insured status under a liability policy and maintain the policy limit for their own protection whenever possible, however most vendors will require proof of insurance that complies with their contractual provisions or insurance requirements. Many of the insurance carriers require a written contractual requirement before additional insured status is triggered under their additional insured policy endorsement.
What is not commonly understood by the production folks administering the issuance of certificates of insurance to their vendors is that insurance for the production company is in effect for the job, subject to the policy terms and conditions, regardless of whether or not a certificate of insurance is issued for that project (as long as we are talking about television commercials, educational, corporate or industrial projects). The question is whether or not the production company has extended some coverage benefit to another party as evidenced by the issuance of the certificate of insurance. Therefore, it follows that the issuance of a certificate will not create coverage for any activities that are excluded under your policies which may include the use of aircraft, certain watercraft, drones, stunts or pyrotechnics. Coverage for any activities that are excluded from coverage must first be arranged with the underwriter before a certificate can be issued.
If you want to learn more speak with your insurance broker or you can reach out to AMA Partner Taylor + Taylor.
Ross Taylor - Rltaylor@taylorinsurance.com
While the AMA is providing this information as a resource, the ultimate choice of insurance policies is yours based on your own independent determination as to what is best for your business. We encourage you to do your own research.