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more on additional insureds
October 12, 2018
more on additional insureds
    Love you daily emails.
    You mention that we should not issue additionally insured certificates to customers and you have explained why. I do not know why they request it.  We get many commercial clients wanting a proof of our G&L or to be listed as certificate holders and I understand that. 
    What should we do with companies that request to be named as additionally insured? Could we include a statement on the document that would help protect us? Maybe something like (This certificate does not grant any more rights to holder and follows all provisions in the monitoring agreement entered into by company and XYZ alarm Co.) Or should we just say no?   95% of the request come in after the installation. I would appreciate your advice.

    You made a tough question very easy.  If the "request" comes in after the installation is complete then you can ignore it, and you should.  Of course I am assuming that you have not even begun the installation without a fully executed Standard Form All in One Agreement.  If you are doing installations without first getting your contract signed then you are , to say the least,  making a mistake.
    Keep in mind that adding your subscriber as an additional insured on your policy is precisely in direct conflict with your contract.  Your contract [if it's the Standard Form Agreement] requires that the subscriber obtain insurance and name you as an additional insured.  And, the subscriber getting that coverage for you is very important, because the All in One also requires that the subscriber indemnify you if there are any claims.  A subscriber will regret having failed to name you as an additional insured if you make an indemnity claim against the subscriber.
    What rights an additional insured has depends on how the policy is written, and the Insurance Brokers will be able to explain that better than I can.  Suffice it to say that an additional insured can have all the rights and protection as an insured, and that's why subscribers request the coverage; they are trying to shift the first layer of coverage to your carrier instead of their carrier so they can minimize their loss run and future premiums.  
    An additional insured coverage can limit the coverage to acts by the primary insured [which would be you], but not all policies are written that way.  Be sure to have your broker explain the additional insured's rights and scope of coverage.  You most likely do not intent to be providing primary coverage for losses suffered by your subscriber that you have nothing to do with.  
    I realize that this issue, like many, distract from your primary objective, which is to grown and manage your business.  However, one claim can disrupt, if not end, years of planning and growth; wipe out equity in a flash.  Insurance is a necessary expense, and as long as you're spending the money for the insurance protection you may as well understand what that protection is and how it affects you and your additional insureds.
    The brokers on 
The Alarm Exchange should be your first stop for coverage and advice.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
516 747 6700