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What is an ‘Additional Insured’ under an Insurance Policy?
Additional Insured under any insurance policy is a very important aspect of any insurance policy.
A typical fire insurance policy, also known as fire and allied perils coverage, protects your property from damage or destruction due to fire.
There are many different coverages that can be included in a fire insurance policy to protect you and your property from the unfortunate events of a fire.
By understanding what each of these coverages provides and how they work together, you can select the best coverage for your needs.
What is an Additional Insured Under a Fire Insurance Policy?
An “additional insured” is someone who is covered by your fire insurance policy in addition to the named insured i.e primary insured, who can make a claim against your insurance.
Why is Additional Insured important?
Incorporation of ‘additional insured’ under any insurance policy makes someone beneficiary as primary insured in case of any loss or damage.
Sometimes, it is also mandatory compliance under any contract to put this clause under the insurance policy.
This can be important if, for example, you have a home business and you want your employees to be covered in case of a fire. It also increases trust between both parties.
Most fire insurance policies will have language that allows for additional insureds, but there may be some restrictions.
For example, the additional insured might only be covered for liability arising out of your negligence.
If you’re not sure whether someone should be listed as an additional insured on your policy, it’s always best to check with your insurance agent or company.
Additional insured vs named insured
Unlike a named insured, an additional insured does not have to be listed on the policy.
However, they must meet certain criteria in order to be eligible for coverage. For example, they must have a financial interest in the property that is being protected by the policy.
If you’re considering adding an additional insured to your fire insurance policy, be sure to check with your insurer about eligibility requirements and how it could affect your premiums.
Some examples of Additional Insured
- Landlord and Tenants
Under property policies, the Landlord might use their tenant’s name as an additional insured.
This is to safeguard the tenant’s interest in case of any damage happens to the property.
Sometimes under the tenant’s insurance policy landlord named use as an additional insured.
- Contractor and Subcontractor
A primary contractor also used its subcontractor’s name as an additional insured
- Manufacturer and Seller
Manufacturers may want to cover the sellers of their products as additional insured under the manufacturer’s liability policies.
How an Additional Insured is Different from a Named Insured ?
An additional insured is someone who is covered by your fire insurance policy in addition to the named insured. The named insured is the person or entity who purchased the policy and is the only one who can make changes to it.
Additional insureds are typically family members or business partners who live in the same household as the named insured. They may also be employees of the named insured.
When to Use an Additional Insured?
As I already explained earlier also, there are many reasons for business owners to add additional insured to their policies, viz.
- Contractual requirement
- Government Statute
- Voluntarily
When Not to Use an Additional Insured?
There are a few key instances when it is generally not advisable to add an additional insured to your fire insurance policy. These include:
-When the additional insured is not directly involved in the work being performed on the property
-When the additional insured does not have a financial interest in the property
-When the additional insured is already covered by another policy
When adding an additional insured to your policy, you will need to provide some basic information about them, such as their name and contact information. You will also need to specify what coverage they are being added for. For example, you may add them as additionally insured for property damage or bodily injury.
Once you have added an additional insured to your policy, they will be protected against any losses that are covered by your policy. This means that if there is a fire at their home or business, they can make a claim against your insurance.
Sample language that can be used to add an additional insured to a fire insurance policy:
Additional Insured : [Name of Additional Insured]
Address : [Address of Additional Insured]
Phone Number : [Phone Number of Additional Insured]
Coverage : Property Damage and/or Bodily Injury
