Difference between named insured and additional insured: Part 1

This post is part of a series sponsored by TSIB.

The terms insured and additional insured are often lumped together for interchangeability. But that’s not the case. Keep reading to learn about each one.

1. Name of insured person

The “first” named insured or named insured is the party who is the owner of the insurance contract. This status gives the policy owner full privileges. Benefits and compensation details Policy provides. This entity/individual will pay premiums, report claims, pay deductibles/retentions, and cancel coverage.

2. Additional Named Insureds

An additional named insured is an entity added to the named insured’s policy. In many cases, the operations of both parties are closely coordinated. As an example, a parent company can take a subsidiary company public. Insurance Policy As an additional named insured.

The first named insured is insured for his or her own business operations. Coverage is not conditional on losses sustained by additional named insureds. Companies should only include additional named insureds if there is a close relationship between the organizations, such as parent-child relationships or contractual obligations.

3. Additional insured person

An additional insured is an additional entity listed on the named insured’s insurance contract. Additional insureds are provided with coverage under the named insured’s policy through the additional insured’s endorsement. To add an insured, the additional entity must contractually agree to insure the named insured. By designating a covered person as an additional insured, Risk transfer based on contractual agreements This gives the additional insured direct rights under the named insured’s policy.

The named insured extends protection to additional insureds under the named insured’s policy terms. However, damages incurred by additional insureds will only be compensated if the losses are related to the business of the named insured. Please note that this coverage does not apply to the additional insured’s own business operations.

Coverage is only provided to additional insured persons in the event of an incurred loss. related to the operation being performed By or on behalf of the first named insured. Requesting additional insured status on the originally named insured’s policy typically provides the needed coverage without exposing the original policy to unrelated manipulation.

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