A while ago, we wrote about third-party liability and how the term is commonly misunderstood by people outside of the insurance industry. We wrote that post in hopes of helping people better understand the term and to also clear up any misconceptions they may have had with it. With that same goal in mind, we want to also explain the term “additional insured.”
What an Additional Insured Is
An additional insured is a person or organization (event holder, business owner, city, etc.) that is not included as an insured under the insurance policy. There are a number of different reasons for adding additional insureds, but in all scenarios it is to protect the additional insured from a claim. In essence, an additional insured is absolved of all liability if a claim is made against the original insured policy holder. In many cases, a person or organization will require the certificate in order for the insured to use their property.
What an Additional Insured is NOT
Many individuals believe that an additional insured means that you can add an additional person under the policy and allow them to share the policy limits. An additional insured certificate does not allow you to add an assistant or employee, but rather protects a separate person or organization from being considered responsible under the insurance policy in case of a claim.
We hope this helps explain additional insureds, but if you have any additional questions, email us at firstname.lastname@example.org.
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