Everything you need to know about named and additional insureds

In this Article:

• Named of insured meaning
• Additional insured vs. additional named insured
• Coverage for an additional insured
• How to use named and additional insureds to fully protect your business
• Adding an additional insured
• Frequently asked questions

Insurance policies include a lot of terminology that may be unfamiliar. You may hear the terms ‘named insured’ and ‘additional insured,’ and wonder if there is a difference. There is, and here’s what it means.

On a business insurance policy, there is always a named insured – the person or entity whose name is on the policy, and who therefore is protected from liability by the coverage offered by the policy. Your business is typically the named insured on your policy.

A policy may also have an ‘additional insured,’ in addition to the named insured. To confuse the issue even further, this party may sometimes be known as an ‘additional named insured.’ It may seem as though a ‘named insured’ and an ‘additional insured’ will have the same coverage under the policy, but that’s not always the case. With all these terms, it can be confusing what the insured definition is and how the relationship to insured meaning impacts your policy needs.

At a high level:

• Insured is a broad term for anyone protected under an insurance policy.
• The named insured is the primary person or business listed on the policy’s declarations page.
• An additional insured is a third party that is added to the policy and granted certain protections. 

Here’s what you need to know.

What is a named insured?

The named insured definition is the person or entity who owns the policy, and whose name appears on the first page of the policy. They may also be referred to as the policyholder or the primary insured. The named insured owns the policy and is entitled to all of the coverage provided by the policy. Losses will be covered per the terms of the policy, up to its limits. If you have purchased a business insurance policy to cover your business, your business is likely the named insured.

There can be more than one named insured on a policy. For example, the business itself and the business owner may both be named insureds. Or a business and its subsidiaries could be named insureds on the same policy.

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Additional insured vs. additional named insured

As you choose a policy, you may wonder what designated insured vs. additional insured denotes and how insured party meaning varies in the industry. The use of these terms may vary from one insurance company to another. At Hiscox, the additional named insured and the named insured both have full rights under the policy. The named insured is the one who is responsible for paying the premiums, and who can cancel the policy. The additional named insured doesn’t have those obligations to the insurer.

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Coverage for an additional insured

When you name an additional insured on your policy, they are covered to the limits of the policy, but typically only for claims arising from acts performed by or on behalf of the named insured.

Here’s an example. Suppose you rent the building your business is in. You have a business owner’s insurance policy. The owner of the building in which you rent space requires that you name them as an additional insured on the policy. They will be covered under your policy

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for damage caused by you or someone acting on your behalf, but not for damage or claims caused by other tenants or natural disasters, for example.

As another example, suppose you are a hairstylist who rents a station at a salon. You have general liability and professional liability policies. The owner of the salon requires that you name them as an additional insured on your policy. This protects the salon if one of your customers is injured during their appointment with you, and they sue you and also the salon.

An additional insured has no ownership in the policy and no responsibility for paying premiums. They cannot make changes to the policy.

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How to use named and additional insureds to fully protect your business

The ability to add additional insureds and named insureds can help you get the most comprehensive protection for your business. Here’s an example of this.

Jack and Jill have a marketing consulting practice. They have two different entities: J&J Copywriting, which is their primary business, and J&J Graphic Design, which is a smaller business. They know they need named insured general liability and professional liability insurance (E&O coverage) to protect themselves.

They purchase a general liability and a professional liability policy from Hiscox, with J&J Copywriting as the named insured. They also name J&J Graphic Design as an additional named insured so that entity will also be fully covered. J&J Copywriting pays the premiums on the contract and handles any administrative tasks that come up.

After a few months, J&J lands a big contract with a new client, NBC Corp. NBC requires that they be added as an additional insured on J&J’s insurance policies. They add NBC Corp. as an additional insured, which means the policy will cover claims against NBC Corp. for marketing work done by J&J.

As part of the scope of work, J&J Graphic Design creates a new logo for NBC Corp. Unfortunately, some people think it looks like the logo of another, similarly named company, and NBC Corp. is sued for intellectual property infringement. Because the suit resulted from a design created by J&J Graphic Design, and NBC Corp. is an additional insured J&J Copywriting’s policies, J&J’s professional liability policy provides coverage for both J&J and NBC Corp. in defense of the lawsuit.

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Adding an additional insured

You can name one or more additional insureds when you purchase your policy. But sometimes a subcontractor, a client, or a vendor will need to be added to your existing policy as an additional insured. At Hiscox, this is a quick and easy thing to do. Just go to the Manage Your Policy page on the Hiscox website. Having the right coverage, and naming the right parties, will help you protect the business you’ve worked so hard to build.

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Frequently asked questions

What does name of insured mean?

The name of insured refers to the individual or entity listed on an insurance policy as having coverage. This designation determines who is protected under the policy and outlines their rights and responsibilities, including coverage limits and obligations such as premium payments.

What is a named insured?

A named insured is the primary policyholder who owns the insurance policy and has full rights to its coverage. This includes managing the policy, making changes, and ensuring premiums are paid. In a business setting, the named insured is typically the company itself or the business owner.

What is an additional insured?

The relationship to insured meaning sounds complex, but it’s really not. An additional insured is a person or organization added to a policy for coverage related to the named insured’s activities. Their protection is usually limited to specific risks arising from the named insured’s operations. Unlike a named insured, an additional insured does not own the policy, cannot modify it, and is not responsible for paying premiums.

Is an additional insured the same as a certificate holder?

No. A certificate holder is simply a person or organization that receives a certificate of insurance as proof that coverage exists. Being listed as a certificate holder does not automatically make them an insured under the policy.

An additional insured, by contrast, is specifically added to the policy, usually through an endorsement, and receives certain coverage rights as described in that endorsement and the policy. 

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