You hear a lot of confusing terms when you first start shopping for insurance. For example, you might have to look up “garaging address” when searching for auto insurance or “declarations page” for any policy in general. But some of the most important terms refer to the people insured—specifically “named insured,” “additional named insured,” and “additional insured.”
Also called a policyholder, a named insured is the primary person(s) or business(es) covered by insurance. You’ll typically find this information on the first page of a policy, and the coverage could list more than one.
For example, a flower shop may be the first named insured listed on a general liability policy, but the business’s owners may also be designated and appear directly after.
Named insureds have the most rights regarding a policy, but they’re also responsible for paying premiums. They can make changes to the coverage and receive notices regarding insurance adjustments.
Additional Named Insured
An additional named insured enjoys all the protections of a primary, but they aren’t typically responsible for premiums and can’t change the policy. For example, a flower shop’s primary owner may be the named insured on the business’s commercial property insurance, but his co-owner could be listed as an additional named insured.
Although they can’t change the coverage, additional named insureds will still get notified of any coverage adjustments.
An additional insured is typically added to a policy through an endorsement after the insurance has gone into effect. However, additional insureds aren’t responsible for premiums, can’t make changes to the coverage, and aren’t notified when adjustments are made.
Instead, their protection is limited to incidents related to their work or responsibilities. For example, a freelance graphic designer may ask to be added to a marketing agency’s liability coverage as an additional insured. Therefore, they will have protection if a customer takes an issue with their designs and sues the marketing agency and the freelancer. However, if the designer gets sued for work unrelated to the agency, they will not have protection.
Call your Hibbs agent if you have questions about these terms or others that have you scratching your head. Our staff is always happy to share our expertise.