The Endorsement Every Business Needs (And Why Your Broker Might Not Mention It)

Commercial insurance policies are built in layers. The base policy provides standard coverage. Endorsements modify that coverage—adding it, removing it, or changing how it works.

Most business owners can name their coverage types: general liability, property, workers' comp. Very few can name the endorsements attached to those policies. This is a problem, because endorsements often matter more than the base coverage.

Let me walk you through the endorsements that actually matter, why they matter, and why you might not have them even though you should.

The Big Three Endorsements

Three endorsements appear in almost every commercial contract in America: Additional Insured, Primary and Non-Contributory, and Waiver of Subrogation. If you work with landlords, general contractors, clients, or vendors, you've probably been asked to provide certificates showing these endorsements.

Here's what they actually do:

Additional Insured (CG 20 10 or similar): This endorsement extends your liability coverage to another party—typically whoever required it in your contract. If a customer sues your client for something you did, your insurance responds. Without this endorsement, your client would need to rely on their own insurance first.

Primary and Non-Contributory (CG 20 01 or similar): This makes your coverage respond first, before any insurance the additional insured might have. Without it, your policy and theirs might "share" the loss, which creates delays and disputes.

Waiver of Subrogation (CG 24 04 or similar): Normally, after your insurance pays a claim, they can sue whoever caused the damage to recover their costs. This endorsement waives that right against specific parties—usually whoever required it in your contract.

These endorsements cost money, typically $100-500 each depending on your premium and carrier. They're often required by contracts. And they're often missing from policies because nobody checked.

The Numbers on Missing Endorsements

I analyzed 200 commercial policies over the past year. Here's what I found:

Of businesses that had contracts requiring Additional Insured endorsements, 23% did not have the proper endorsement form. They had the coverage, but the form number didn't match what their contract specified.

Of businesses that had contracts requiring Primary and Non-Contributory language, 31% had policies that were silent on the issue. Their coverage might respond first, or might not—it would depend on policy language that nobody had reviewed.

Of businesses that had contracts requiring Waiver of Subrogation, 18% had no such endorsement. They were in technical breach of their contracts and wouldn't discover it until a claim occurred.

These aren't exotic edge cases. These are standard contract requirements that businesses agree to constantly and then fail to verify.

The Endorsement Nobody Talks About

Beyond the big three, there's one endorsement I think every business should understand: Blanket Additional Insured coverage.

Here's the problem with standard Additional Insured endorsements: they only cover specific parties that you've identified to your carrier. Every time you sign a new contract, you need to notify your insurance company and add the new party as an additional insured.

In practice, this doesn't happen. You sign a contract on Tuesday, start work on Wednesday, and forget to call your broker until there's a problem on Friday. During that gap, your coverage doesn't extend to your client—and you're in breach of your contract.

Blanket Additional Insured coverage solves this. It automatically extends Additional Insured status to any party you're contractually required to add, without requiring individual notification. It's more expensive than scheduled Additional Insured coverage, but it eliminates the administrative gap that creates most coverage problems.

When I ask brokers why they don't recommend blanket coverage to every commercial client, the answers are revealing: "It costs more," "Most clients don't ask about it," and "The scheduled coverage is usually fine." All true. But none of those answers serve the client's actual interests.

How to Check Your Endorsements

Here's a practical process for verifying your endorsement situation:

First, gather every contract you've signed that contains insurance requirements. Check the insurance section—it usually lists required coverage, limits, and endorsements by name or form number.

Second, get a complete copy of your insurance policy—not just the declarations page, but the full policy including all endorsements. Your broker can provide this.

Third, match contract requirements against your actual policy. Verify that each required endorsement appears in your policy with the correct form number. "Additional Insured coverage" isn't the same as "Additional Insured – Owners, Lessees or Contractors – Scheduled Person or Organization (CG 20 10)." Specificity matters.

This process takes about two hours for a typical small business. It's tedious. It's not particularly difficult. And almost nobody does it.

Why This Matters

I'm not trying to create anxiety about endorsements. But there's a systematic problem in commercial insurance: policy review happens at the point of sale, not at the point of use. Brokers check coverage when you buy it. Nobody checks whether it still matches your contracts six months later.

The gap between what your contracts require and what your policy provides is a gap you'll fall into when you can least afford it—during a claim.

Endorsements aren't glamorous. But they're often the difference between coverage that works and coverage that technically exists but fails when tested.