A named insured is the primary policyholder who purchases the insurance policy and is listed as such on the policy declaration page. An additional insured, on the other hand, is someone who is not the primary policyholder but is added to the policy as an insured party.
| Aspect | Named Insured | Additional Insured |
| Definition | The primary policyholder who purchases the policy | A third party added to the policy by the named insured to provide coverage |
| Purchase | Buys the policy and pays premiums | Does not purchase the policy, but is added by named insured |
| Coverage | Receives coverage for all policy provisions | Receives coverage only for the specific additional insured endorsement |
| Changes to policy | Has the right to make changes to the policy, such as adding or removing coverage | Cannot make changes to the policy, but the named insured can |
| Premium payments | Responsible for paying premiums to keep the policy in force | Not responsible for paying premiums, unless contractually agreed upon |
| Obligations | Responsible for fulfilling the policy’s obligations, such as providing notice of claims, and cooperating with the insurer in the claims process | Only responsible for fulfilling obligations specific to their own actions or negligence |
| Policy ownership | Owns the policy and can exercise all rights and privileges | Does not own the policy and has no control over it |
An additional insured is a person or entity who is added to an insurance policy by endorsement to provide them with coverage for certain types of claims, in addition to the named insured. This endorsement may be added to various types of insurance policies, such as commercial general liability, automobile liability, and property insurance. The additional insured is typically added to the policy to protect them from claims arising out of the named insured’s actions or operations. This may include claims related to bodily injury, property damage, or other types of losses. The additional insured may be an individual, organization, or business entity, and they may be added to the policy for a specific period of time or for the duration of the policy.
Adding an additional insured to an insurance policy typically involves the following steps:
- Review the policy: Review the insurance policy to determine whether adding an additional insured is allowed, and if so, what the requirements and limitations are.
- Obtain information: Obtain the necessary information about the additional insured, such as their legal name, address, and the reason for adding them to the policy.
- Complete an endorsement: A written endorsement is required to add an additional insured to an insurance policy. The endorsement may be provided by the insurance company or the policyholder’s insurance agent.
- Submit the endorsement: Once the endorsement is completed, it should be submitted to the insurance company or agent for processing. Some insurance companies may require additional documentation or information, such as a certificate of insurance, to be provided along with the endorsement.
- Pay any additional premium: Depending on the type of policy and the specific terms of the endorsement, adding an additional insured may result in an additional premium payment. The policyholder should review the endorsement and any related billing statements carefully to ensure that the correct amount is being charged.
It is important to note that the process for adding an additional insured may vary depending on the type of insurance policy and the insurance company’s requirements. The policyholder should contact their insurance agent or company for specific guidance on how to add an additional insured to their policy.
There are different types of additional insured endorsements that can be added to an insurance policy, including:
- Automatic Additional Insured: This endorsement automatically extends coverage to an additional insured without the need for a specific endorsement request. This type of endorsement is typically used in situations where the additional insured has a contractual agreement with the named insured.
- Scheduled Additional Insured: This endorsement lists the specific additional insured parties that are covered by the policy. Each additional insured is identified by name or description, and their coverage is limited to the terms outlined in the endorsement.
- Blanket Additional Insured: This endorsement provides coverage to any person or entity that meets the definition of an additional insured under the policy, without the need for a specific endorsement request. The coverage provided is typically limited to specific operations or activities.
- Completed Operations Additional Insured: This endorsement provides coverage to an additional insured for claims that arise after the named insured has completed their work or operations. This endorsement is typically used in construction or other contracting situations.
- Primary and Non-Contributory Additional Insured: This endorsement ensures that the additional insured’s coverage is primary to any other insurance they may have and that their coverage will not be reduced by the named insured’s insurance.
There are several benefits to having additional insured status on an insurance policy:
- Protection against liability: An additional insured is covered by the policy for certain types of claims, just like the named insured. This provides protection against liability in the event of a covered loss or accident, which can help mitigate financial damages.
- Contractual requirements: Many contracts and agreements require parties to be added as additional insureds on the policy. Having additional insured status can help fulfill these contractual requirements and avoid breach of contract issues.
- Ease of business: In some industries, having additional insured status can make it easier to conduct business with other parties. For example, a contractor who is an additional insured on a property owner’s policy may be more attractive to other potential clients.
- Simplifies claims to handle: Having additional insured status can help streamline the claims handling process. All parties involved in a loss or accident can be covered under the same policy, which can help simplify the claims process and reduce the risk of disputes.
- Cost savings: In some cases, having additional insured status can help reduce costs. For example, a contractor who is added as an additional insured to a property owner’s policy may not need to purchase their own liability insurance, which can result in cost savings.
A named insured is the primary policyholder who purchases an insurance policy and is listed by name on the policy declaration page. The named insured is responsible for paying the insurance premiums and has the right to make changes to the policy, such as adding or removing coverage. They are also typically responsible for fulfilling the policy’s obligations, such as providing notice of claims and cooperating with the insurer in the claims process.
As the primary policyholder, the named insured has several rights and responsibilities when it comes to their insurance policy.
Rights:
- The right to purchase the insurance policy and choose the coverage and limits that best suit their needs.
- The right to make changes to the policy, such as adding or removing coverage or changing the deductible.
- The right to receive a copy of the policy and review it for accuracy.
- The right to file a claim and receive payment for covered losses.
Responsibilities:
- The responsibility to pay insurance premiums on time to keep the policy in force.
- The responsibility is to provide accurate and complete information when applying for the policy or filing a claim.
- The responsibility is to cooperate with the insurance company in the investigation and settlement of claims.
- The responsibility is to notify the insurance company of any changes to the insured property or circumstances that may affect coverage.
A named insured is a person or entity specifically identified as the primary policyholder in an insurance policy. Examples of named insured in insurance policies can include:
- Individuals – A person who purchases an insurance policy for themselves may be listed as the named insured. For example, if John Smith purchases a homeowner’s insurance policy for his house, he would be the named insured.
- Organizations – A company that purchases an insurance policy for its business operations may be listed as the named insured. For example, if ABC Corporation purchases a liability insurance policy to protect against lawsuits, it would be listed as the named insured.
- Businesses – A business owner who purchases an insurance policy for their company may be listed as the named insured. For example, if Jane Doe owns a landscaping business and purchases a commercial auto insurance policy to cover her company vehicles, she would be the named insured.
- Other entities – Other entities such as trusts, estates, and partnerships may be listed as named insureds in insurance policies. For example, if a family trust purchases a life insurance policy, the trust would be listed as the named insured.
References:
https://www.burrismacomber.com/additional-insured-vs-additional-named-insured/
https://www.nextinsurance.com/blog/named-insured-vs-additional-insured/