This post is part of a series sponsored by TSIB.
If you work on a construction project, the company you work for may ask you to be a construction manager for the construction project. Additional Named Insured or Additional Insured. Although it is easy to believe that they are the same thing, there are actually some major differences between the two.
An additional named insured is an entity that is added to a policyholder’s policy. This gives the additional named insured many of the benefits and coverage that the insurance provides, but there are usually 3 additional named insureds.rd A party added to a named insured’s policy. This is done to support indemnification obligations within the contract between the third party and the named insured. For example: General contractor (GC) and/or the project owner Trade contractor company policy As an additional insured on certain projects.
additional insured person
Coverage provided through additional insured endorsements is very limited for liability arising from acts performed by or on behalf of the named insured. In other words, if you are a GC who is an additional insured, your coverage applies only to liability caused by the designated insured trade contractor. The GC typically requires the trade contractor to name the GC as an additional insured on the trade contractor’s corporate policy. Additionally, trade contractors typically agreed to compensate It also indemnifies GC from any liability arising from trade contractors under written contracts.
For example, if a trade contractor or someone working on his behalf causes damage to the GC or the project owner, the GC will usually be compensated. However, if a third party unrelated to the trade contractor causes the damage, the trade contractor may be compensated, but the GC or project owner may not be. In situations where a GC causes damage covered under a trade contractor policy, the GC is not entitled to indemnification under the additional surety endorsement.
There are limitations to the coverage available to additional insured persons. Coverage under an insurance contract is shared between the named insured and the additional insured if a situation arises that creates liability for both parties.
for example,
If the named insured has $50,000 of liability coverage, additional insureds will also receive $50,000 of coverage.
If either the Named Insured or the Additional Insured becomes liable, $50,000 is available to cover that liability.
However, if both parties are at fault, you will have to pay a total of $50,000 in compensation.
Additional named insured person
The “additional” named insured receives all the benefits of the actual policyholder. Following the above scenario, the “additional” named insured will be compensated from the damages caused by the accident. trade contractors, The same applies to losses caused by “additional” insureds. So, in this case, the policyholder has her $50,000 of coverage, and the “additional” named insured has her $50,000 of coverage.
However, an “additional” named insured does not have all the privileges and/or obligations of the policyholder or original named insured. They cannot pay premiums, cancel coverage, or receive policy notifications.
It is important to assess the expectations, goals, benefits, and scope that the parties seek to receive under the policy. If limited coverage is sufficient, additional insurance riders may be sufficient. However, if you require complete coverage of all potential liability, an “additional” named insured is required.
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