Q. Why are additional insureds not added to professional liability policies?
A. In many instances, coverage may already be in place for the entity or individual seeking AI status. Look in the definitions section, specifically at the definition of “You,” “Named Insured” and also “Subsidiary.” For example, under some policies an independent contractor may already have coverage for the services performed according to their contract with the named insured. If the entity or individual seeking AI status is a subsidiary, they may already be covered depending upon how much equity ownership the named insured has in the subsidiary. Finally, some policies may automatically include clients who contractually require additional insured status for services performed by the named insured.
Alternatively, don’t forget about the Insured vs. Insured exclusion. This becomes especially important when an entity or individual is specifically granted coverage as an AI but AI is not a defined term in the policy. In these circumstances, it’s unlikely that the named insured or other insureds will have coverage for claims the AI brings against other insureds, even if it’s a claim brought in their capacity as a customer.