You send the email to every new supplier: Please add us as additional insured on your GL policy. Most respond with their certificate of insurance. But a certificate of insurance is not an additional insured endorsement. In a 2020 study by the Independent Insurance Agents and Brokers of America, 47% of small business owners could not explain the difference between a certificate holder and an additional insured.
The problem
Additional insured status is a specific insurance mechanism defined by endorsement forms published by the Insurance Services Office. The most common form is the ISO CG 20 10, which extends the named insured's commercial general liability coverage to an additional party for liability arising out of the named insured's operations.
In the travel industry, DMCs and operators routinely request additional insured status from their suppliers. The request is standard in industries like construction, real estate, and event management. But the travel supply chain is dominated by small operators, many carrying basic commercial general liability policies that do not include the endorsement capacity to add additional insureds.
When a supplier sends you a certificate of insurance listing your company as the certificate holder, that certificate confers no coverage rights. It is an informational document only. The ACORD 25 certificate form includes a disclaimer stating that it does not amend, extend, or alter the coverage afforded by the policies listed. Only a formal additional insured endorsement, attached to the policy itself, creates coverage rights.
The gap between what operators request and what suppliers can actually deliver is widespread. Many suppliers do not understand the request. Their insurance brokers may not carry endorsement-capable policies. And the cost of adding additional insureds, which can increase premiums by 10 to 25 percent, discourages compliance even when the capability exists.
What additional insured status actually provides
When you are properly endorsed as an additional insured under ISO CG 20 10, the supplier's general liability policy responds to claims against you that arise out of the supplier's ongoing operations. If a guest is injured during a supplier-operated tour and sues both the supplier and your company, the supplier's insurer has a duty to defend and indemnify you under the endorsement. Without it, you must rely on your own policy, which may trigger a coverage dispute if your insurer argues the claim arises from the supplier's operations rather than yours. The endorsement effectively creates a direct insurance relationship between you and the supplier's carrier for claims connected to that supplier's work.
Why most travel suppliers cannot comply
Small activity operators, local guides, transportation providers, and venue operators frequently carry policies from regional or specialty insurers that do not offer the ISO CG 20 10 endorsement. Some carry only commercial auto or professional liability policies with no general liability component. Others have general liability policies with aggregate limits too low to meaningfully cover an additional insured claim. A local kayak outfitter with a $500,000 per-occurrence limit and a $1 million aggregate may technically add you as additional insured, but a single serious injury claim could exhaust the entire policy, leaving nothing for your defense.
What to do when the supplier cannot add you
When a supplier cannot provide additional insured status, the risk does not disappear. It shifts entirely to your company. Options include requiring higher insurance minimums as a contracting condition, purchasing an owners and contractors protective liability policy (OCP) that covers your exposure from the supplier's operations, or adjusting your own commercial umbrella to account for the uncovered exposure. Document every supplier's insurance status, the specific endorsement they can or cannot provide, and your risk mitigation decision for each. This record becomes evidence of due diligence if a claim arises.
What to do now
Stop treating certificates of insurance as proof of coverage. A certificate holder listing provides no insurance rights. Require the actual ISO CG 20 10 endorsement naming your company, and verify it with the supplier's broker directly. For every supplier that cannot provide additional insured status, document the gap and make a conscious risk decision: adjust your own coverage, require higher minimums, or decline the supplier relationship. Untracked insurance gaps are the most common source of unbudgeted loss in the travel supply chain.