Additional insured and named insured are terms that usually appear on an insurance policy and are easily confused terms as they are used interchangeably by many. There are, however, many important differences between the two and understanding these differences can help individuals avoid financial losses, litigation, and other issues that come with misunderstanding. There are, however, a number of important differences between these terms. The article that follows offers a clear explanation on each term and shows the similarities and differences between named insured and additional insured.
Named Insured
Named insured is the owner of the insurance policy that has been taken out, and this is the person that has purchased the insurance policy. The named insured will be named on the first page of the policy and on the declarations page and will be referred to as “you” and “your” throughout the rest of the policy. There can be more than one named insured, and these individuals or parties have the best and broadest coverage and protection. The named insured is the only person or party that has the power to make any changes or alterations in the policy. They also have the authority to file claims, make payments, receive insurance funds, cancel the policy altogether, and make any other changes. The named insured also should be the party that has the primary interest in the asset or property that is being insured and should hold legal title to the assets.
Additional Insured
The additional insured is a person or party that holds liability interest in the asset that is being insured. The additional insured status will be provided to a third party that has been promised indemnification by a named insured. This means that the named insured will extend the protection in the insurance policy to the additional insured under the terms and conditions stated in the policy. However, the policy will cover the additional insured only for damages that have been incurred for operations that were performed on behalf of the named insured. The additional insured will not have any power to make changes to the policy in any manner. Further to this, the additional insured will only be able to obtain liability protection from the insurance policy and will not be able to obtain any other coverage for losses that may result from physical damage, vandalism, theft, fire, etc.
What is the difference between Named Insured and Additional Insured?
The named insured and additional insured are terms that usually appear on an insurance policy. They refer to two different kinds of parties that are indemnified under the terms and conditions of the policy. The named insured is usually the individual who earns and purchases the insurance policy. The named insured has the broadest coverage, and are the only individuals or parties that can make changes, or even cancel the policy. The additional insured, on the other hand, is a party that holds liability interest in the asset being insured. The additional insured will be provided indemnification by the named insured, which is why the additional insured has been named in the policy. However, the policy will cover the additional insured only for damages that have been incurred for operations that were performed on behalf of the named insured.
Summary:
Named Insured vs Additional Insured
• The named insured and additional insured are terms that usually appear on an insurance policy. They refer to two different kinds of parties that are indemnified under the terms and conditions of the policy.
• Named insured is the owner of the insurance policy that has been taken out, and this is the person that has purchased the insurance policy.
• The named insured has the broadest coverage, and are the only individuals or parties that can make changes, or even cancel the policy.
• The additional insured is a person or party that only holds liability interest in the asset that is being insured.
• The additional insured are only covered for damages that have been incurred for operations that were performed on behalf of the named insured.