What is Additional Insured?
An additional insured is a person or organization that is not the primary policyholder but is added to an insurance policy to receive protection under that policy. This term is often used in business and property insurance contexts, where multiple parties may need coverage on the same policy for liability purposes.
For example, in a contractor agreement, a property owner may request to be listed as an additional insured on the contractor’s insurance policy. If a claim arises due to the contractor’s work on the property, the property owner will also be covered. In a similar scenario, tenants might be added as additional insured on a landlord’s property insurance to cover potential liability in case of an incident.
The additional insured can benefit from liability coverage, meaning they are protected from claims involving property damage or bodily injury where they could be held responsible. Adding someone as an additional insured is a common practice to help mitigate risk and ensure that all involved parties have adequate protection in the event of an insurance claim.
In some cases, adding an additional insured can increase the insurance policy’s premium, as it extends coverage to more individuals or entities.
