What Is As Their Interests May Appear (ATIMA)?
The term "as their interests may appear" (ATIMA) is a standard line in a business insurance policy that extends the coverage to some other parties doing business with the insured. The parties or their covered property may not be specifically named in the policy.
The term encompasses damages to the property of subcontractors, vendors, or rental equipment operators working with or for the insured company but is limited to assets in use by the insured company.
Key Takeaways
- As their interests may appear (ATIMA) is a legal concept that refers to two or more entities that are linked to one another via shared interests.
- The purpose of an ATIMA is to extend insurance coverage to companies that the insured regularly engages in business with.
- This related coverage is only valid for losses directly attributed to the business that the companies do together.
- Insurance for builders commonly includes ATIMA since they work with many subcontractors in the course of a project.
- Those insured via ATIMA may receive less favorable or smaller claims payouts than the primary policyholder.
Understanding ATIMA
ATIMA extends an insurance policy's coverage to include companies that work with the insured company without requiring that they be named in the policy. For example, the insured company may use equipment rented from another company. This other party may be covered as an “additional insured.” The company and every item of equipment it rents to the insured does not have to be listed in the policy. It is covered by the term “as their interests may appear.”
Historically, underwriters may have borrowed the phrase ATIMA from marine policies that were written to include the cargo being carried by a ship regardless of the actual ownership of the goods. The phrase now commonly appears in insurance policies purchased by builders, who may employ many subcontractors in the course of a project.
A related insurance contract term is "its successors and/or assigns as their interests may appear" (ISAOA/ATIMA). This language is used in a so-called "closing protection letter" that title insurers add to title insurance policies in order to protect banks and borrowers in real estate transactions and, later on, to protect financial institutions in the secondary mortgage market. It insures those parties for any losses caused by negligence or fraud.
Limitations of ATIMA Coverage
The International Risk Management Institute (IRMI) warns that the actual extent of the coverage included with this term may be open to different interpretations by the insured and the insurer. If the dispute goes to court, it also is open to interpretation by a judge or a jury. Moreover, additional insureds may not have the same rights as the named insured in the policy itself. The insured company may change or cancel its policy without notifying the additional insured parties.
Additional insureds are in any case limited to the amount of insurable interest they have in the risks covered in the insurance policy. For example, say a company purchases a property insurance policy to protect against damage to the contents of its office building. The company rents a water cooler from another company. That party is included as an additional insured. The water cooler is covered, but nothing else belonging to the company is.
The International Risk Management Institute warns that ATIMA coverage can be open to different interpretations by the insured and the insurer.
How ATIMA Claims Are Paid
If a claim is made against the insurance policy, an additional insured party with interest listed as ATIMA may be listed in the overall claims settlement.
However, how the additional insured is paid depends on how the insurer processes its claims. It may write a single check and leave it up to the insured company to resolve the matter rather than pay the additional party directly.
Frequently Asked Questions
What Is a Loss Payee?
A loss payee is an entity that an insurance claim pays out to. In an ATIMA claim, the loss payee may include both the primary insured and the sub-insureds.
What Is Additional Insured Mean?
Additional insured are the sub-insured parties that ATIMA coverage would extend to beyond the primary insured.
What Is the Difference Between ISAOA and ATIMA?
Its successors and/or assigns as their interests may appear (ISAOA) is a type of ATIMA coverage that is included by title insurers in order to extend coverage to other parties involved in a real estate transaction. Therefore it is a specific type of ATIMA language that deals with the specific case or context of real estate closings.
Is there ISAOA/ATIMA language in mortgage protection clauses?
Yes. This effectively protects the mortgagee from any negative issues found in a title search that may disrupt a real estate closing.
FAQs
The term "as their interests may appear" (ATIMA) is a standard line in a business insurance policy that extends the coverage to some other parties doing business with the insured. The parties or their covered property may not be specifically named in the policy.
What does atima mean on an insurance policy? ›
"As their interests may appear" (ATIMA) is a phrase added to insurance policies and endorsem*nts to add others as insureds.
What does "as their interests may appear" mean? ›
Term: AS THEIR INTERESTS MAY APPEAR. Definition: This phrase is often used in insurance policies to show that the person named in the policy has some kind of interest in the property that is being insured, even if it's not specified. It means that they are entitled to benefits to the extent of that interest.
What is a loss payee as its interests may appear? ›
Loss Payee “as its interests may appear”
A "loss payee" is a person referenced in a loss payable clause. A loss payable clause in an insurance policy permits the policyholder to direct the insurance company to pay loss due to the policyholder to another party.
What does additional interest mean on a homeowners policy? ›
What is an Additional Interest? An Additional Interest is someone who has a financial interest in a property or item that is insured but has no actual ownership of it. A party listed as an Additional Interest typically has a stake in making sure the insurance coverage continues.
What is additional insured as their interests may appear? ›
As their interests may appear (ATIMA) is a legal concept that refers to two or more entities that are linked to one another via shared interests. The purpose of an ATIMA is to extend insurance coverage to companies that the insured regularly engages in business with.
What is the Atima mortgage clause? ›
The ATIMA or “as their interests may appear”, is another common component of a mortgagee clause. This component extends the insurance policy's coverage to any associated parties who may incur losses if the property becomes damaged or destroyed.
What are the risks of adding an additional insured? ›
There is also a risk of being under-insured or uninsured as additional insureds. Second, there is the risk of breaching a contract, thus potentially becoming the insurer of the other party when they are the party obligated to provide additional insured coverage.
Why do landlords want to be listed as additional insured? ›
Ensuring Adequate Coverage: Your landlord wants to ensure that your insurance policy provides enough coverage for potential damages or liabilities that may affect the property. Being an additional insured allows them to verify that the policy meets their requirements.
Why do companies want to be listed as additional insured? ›
The purpose of additional insured endorsem*nts is to keep the burden of risk closest to those parties most likely to create losses, which typically is third parties contracted to perform the work.
If the lender is noted as the first loss payee on an insurance policy, it will receive the insurance proceeds instead of the insured party (save for any public liability or third party liability insurance).
What is the purpose of a loss payee? ›
The loss payee is the party to whom the claim from a loss is to be paid. A loss payee can mean several different things; in the insurance industry, the insured, or the party entitled to payment, is the loss payee. The insured can expect reimbursem*nt from the insurance carrier in the event of a loss.
Can a loss payee file a claim? ›
It's important to note that though both additional insureds and loss payees can receive benefits, they lack the full authority of the named insured. The named insured is the only person or entity that can request changes to the policy, submit claims under it, or cancel it.
What does interest mean in insurance? ›
Insurable interest is the legal and financial interest or attachment someone has for an asset or piece of property that a life insurance policy may cover.
Who should be listed as an additional interest? ›
Additional interest is a person or entity that has a financial interest in your property but isn't an owner and can't collect a claim payout. If you're renting, your landlord or property manager might want to be included as additional interest so they know if you have coverage.
Whose interests are protected by homeowners insurance? ›
Homeowners insurance primarily protects the interests of the buyer and the lender. The insurance covers damages or losses to the property, securing the lender's investment and the buyer's residency.
What is the abbreviation for insurance terms? ›
List of Insurance Abbreviations (A-Z)
| Abbreviation | Expanded Form |
|---|
| HIPAA | Health Insurance Portability & Accountability Act |
| HIM/ HIX | Health Insurance Marketplace/ Health Insurance Exchange |
| HMO | Health Maintenance Organization |
| HRP | High Risk Pool |
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An additional insured is a party to the insurance policy, giving them an independent right to enforce its rights under the insurance policy directly • against the insurance company. indemnity expressly states that indemnitor is agreeing to assume liability for injuries to its own employees.
Is a mortgagee automatically an additional insured? ›
A person or entity that's listed as additional insured also receives coverage under the policy and has the ability to make claims. If you have a mortgage, your lender could be an additional insured. However, in most cases, an additional insured is someone who lives in the home.
What is an example of a mortgagee clause? ›
For example, if you obtain a mortgage to buy a home or property and that property is then destroyed in a hurricane, the mortgagee clause would ensure that the loss would be payable to your lender even though it's part of your standard insurance or hurricane insurance policy.
