The Difference Between ‘Named Insured’, ‘Additional Insured’ and ‘Named Additional Insured’

October 26, 2018

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Named Insured’, ‘Additional Insured’, and ‘Named Additional Insured’ are the three most common names the insurance industry gives to people or businesses covered under standard insurance policies. While these terms are similar they have different meanings, which affect the types and amount of coverage available.

It’s important to understand the meanings of these terms so that you can be fully aware of what exactly you are covered for and what is not covered in your policy.

Named Insured

The Named Insured is the person (or people) or business (or businesses) actually named in the policy. There can be more than one named insured, and you can usually find these on the first page.

In most cases, the business will be the only named insured, but the owners or subsidiaries can also be Named Insureds. In terms of cover, Named Insureds have the broadest protection and indemnity under the policy. The named insured will typically be in charge of choosing coverage types and amounts, will receive the premium notice and any notices of cancellation, and will assume responsibility for payment of premiums.

Additional Insured

“Additional Insured,” usually refers to a person or entity added to the policy by an endorsement. In general, endorsements will provide cover to the people or businesses named on them only for claims arising out of the acts or omissions of the primary insureds. Additional Insureds are therefore not obligated to pay premiums and typically do not receive notices of policy changes or cancellations.

Additional Named Insured

An additional named insured is a person or business that is named somewhere else in the policy. An additional named insured will have the same rights as a “Named Insured” but typically won’t be responsible for the premium. They will however be entitled to notice of policy changes and cancellations and will have the same coverage as the Named Insureds but share the policy limits. An “Additional Named Insured” will most often be an affiliate, partner or co-owner of the primary insured.

What are the Main Differences Between These Terms?

There aren’t huge practical differences between a named insured and an additional named insured as both are entitled to the full benefits of the policy. There are however differences for a named additional insured due to the terms of the endorsement. Additional Insureds not have coverage for claims against them that aren’t related to claims against the primary insured.