This post is part of a series sponsored by TSIB.
The terms “insured” and “additionally insured” are often lumped together to make them interchangeable. However, this is not the case. Read on to learn more about each one!
1. First named insured person
A “first” named insured or named insured is the party that is the policyholder. This status entitles the policyholder to all benefits and coverage provided by the policy. This company/individual pays premiums, reports claims, pays deductibles/withholdings, and cancels coverage.
2. Additional named insured
Additional Named Insureds are companies that have been added to the Named Insured’s policy. The activities of both parties are often closely linked. An example would be that a parent company could list its subsidiary as an additional named insured on the business insurance policy.
The first named insured is insured for his own business operations. The insurance cover does not depend on the damage incurred by an additionally named insured person. Companies should only include additional named insureds if there is a close connection between the organizations, such as a parent-subsidiary relationship or due to a contractual obligation.
3. Additional insured person
Additional insureds are additional companies listed on a named insured’s policy. An additional insured person is granted insurance coverage under the policy of the named insured person based on an additional insured note. To add another insured, the additional company must contractually agree to compensate the named insured. Naming the indemnitee as an additional insured reinforces the risk transfer achieved in the contractual arrangements, which grants the additional insured direct rights under the named insured’s policy.
The named insured extends coverage to additional insureds in accordance with the terms of the named insured’s policy. However, there is only insurance cover for damages caused by the other insured party if there is a connection between the damage caused and the business activities of the named insured party. Furthermore, this insurance coverage does not apply to the additional insured person’s own business operations.
Insurance cover is only available for additional insured persons if the damage incurred is related to activities carried out by or on behalf of the first-mentioned insured person. Requiring additional insurance status on the first-named insured’s policy will typically provide the necessary coverage without exposing the original policy to unrelated events.
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2024-04-19 04:36:05
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