Contracts usually require one party to name the other as an additional insured, and also to waive subrogation against them (sometimes the waiver is mutual). Waivers of subrogation are intended to protect each party from claims by the other; additional insured status is protection against third party claims.
Mark Bell on the IRMI website (https://www.irmi.com/articles/expert-commentary/additional-insured-status-and-waivers-of-subrogation) explains why both are needed:
- Losses may fall outside the scope of the additional insured endorsement.
- Losses may exceed the limit(s) in the contract.
- The risk is not covered in the insurance policy.
- The loss is outside the additional insured's interest.
- The additional insured may not be included in an excess or umbrella policy.
- Some policies e.g. Workers Compensation do not permit additional insured status.
- State laws may not allow insurance for an additional insured's sole negligence.