Naming The Insured (2024)

Insurance issues are like casualty and condemnation: When they come up in lease negotiations, they are often left to the lawyers to handle. But insurance issues can be complicated, and many lawyersrely on their clients' insurance advisers to be sure they are getting it right.

Even some of the basic lease provisions covering insurance and indemnity concerns can baffle inexperienced counsel. One insurance issue that often stymies shopping center professionals is the difference in meanings of the terms "named insured," "additional insured" and "additional named insured."

Landlords often require a tenant to obtain both property damage insurance and liability insurance. Landlords require coverage as an additional named insured on property damage policies and as an additional insured on liability policies.

Property damage policies The tenant's property damage insurance will often be required to cover the leasehold improvements installed by the tenant in the leased premises. Because these leasehold improvements actually become a part of the real estate, the landlord wants to be covered under the tenant's property insurance as an owner.

Since it is the tenant's property damage policy, and the tenant's interest in the leasehold improvements is being insured, the tenant is the named insured. To acknowledge the landlord's ownership interest in the property being insured and to provide the landlord the same type of coverage that the tenant receives, the landlord must be shown on the policy as an additional named insured.

Thus, both the tenant and the landlord essentially are given the same coverage; they are both named insureds on the policy. The landlord is simply an additional party who is given the same coverage as the named insured, i.e., an additional named insured.

Liability policies Many states place ultimate responsibility on the owner of real estate for injuries sustained by persons invited to the owner's property, even if the injury is not caused by the acts of the owner itself. Thus, shopping center landlords carry liability insurance as the owner of the shopping center.

However, if the injury was actually caused by the tenant while operating in the shopping center, the landlord will want the tenant to cover the landlord for any liability it incurs because of the tenant. Thus, landlords will require that the tenant carry liability insurance to cover the liability caused by the tenant. The tenant is the named insured on the policy, since it is a policy covering acts of the tenant. The landlord wants to be an additional insured on the policy, who will be covered for any liability it incurs due to the acts of the tenant.

As an additional insured, the landlord is not given the same full coverage as the tenant. In other words, the tenant isn't covered against liability caused by the landlord's acts. Instead, it is covered only against liability due to the acts of the tenant.

If the landlord were to be shown as an additional named insured on the liability policy, it would actually be covered as a named insured for any liability caused by its own acts. However, since most states have a public policy against permitting one party to protect a second party against the second party's own negligent acts, generally a landlord does not demand to be an additional named insured on the tenant's liability policy. It usually suffices if the landlord is protected against liability caused only by the tenant.

Sometimes tenants with a great deal of leverage will demand that the landlord add the tenant as an additional insured on the landlord's liability policy. The tenant takes the position that it should be able to look to the landlord's liability policy, and not the tenant's own liability policy, for coverage in the event a suit is brought against it for injuries to a customer at the shopping center caused not by the tenant, but by the landlord. Landlords often resist this if they have a blanket liability policy that covers many shopping centers with hundreds of tenants.

Drafting tip The word "named" should be used very carefully in the lease when describing the coverage required. Be sure that only the party who is to be afforded all the rights of an owner of the policy is required to be a named insured, whether as the original named insured or as an additional named insured.

Just to keep things straight, it might be best when referring to giving a party only additional insured status, to use the term "add a party as an additional insured" rather than naming such party as additional insured.

Naming The Insured (2024)

FAQs

Naming The Insured? ›

Name of Insured is a term used in the insurance industry to refer to the individual or entity that has an insurance policy in their name. The name of insured is listed on the policy documents as the party that has the legal right to make claims for losses covered by the policy.

What does it mean by the name of the insured? ›

In insurance, a named insured refers to a person or firm whose name appears at the top or first page of an insurance contract and who receives all the protections of the insurance policy. They're also called a policyholder or primary insured.

What do I put for an insured name? ›

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.

Is the name of the insured the policyholder? ›

Yes, the policyholder is the same as the named insured. The named insured is another way of saying policyholder.

What are the risks of naming 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.

Who should be the first named insured? ›

This individual or entity is usually the policyholder who is primarily financially responsible for the policy, and is the first named insured in the policy document.

Why is named insured important? ›

Again, the named insured is the entity whose name appears at the top of an insurance policy and receives protections from the policy. They're also typically the one who purchases the policy, makes decisions about their coverage, and pays for the coverage in the form of monthly premiums.

Is the name the insured or DBA? ›

The named insured should be the owner's name and the business/operating name should be shown under 'dba'. A corporation is a LEGAL ENTITY created by individuals for the purpose of operating for a profit.

What is the difference between a named insured and an insured? ›

A named insured is entitled to 100% of the benefits and coverage provided by the policy. An additional insured is someone who is not the owner of the policy but who, under certain circumstances, may be entitled to some of the benefits and a certain amount of coverage under the policy.

What does "named insured" mean on car insurance? ›

As you might guess, the named insured on an auto insurance policy is the individual who purchases coverage and has their name listed on the policy declarations page. The named insured is responsible for paying premiums on the policy as well as filing claims with the insurance provider.

What do you call a person who is not named as an insured? ›

Typically, named insureds are the purchasers of the insurance. In contrast, unnamed insureds are not mentioned by name in the contract but are entitled to receive insurance benefits because they fall within a particular class of person covered by the contract.

Which person is the insured? ›

Insured is a person or legal entity whose financial losses are covered by the insurance policy. Under general and health insurance policies the insured is entitled to receive the benefit amount from the insurer for the covered financial loss.

Who is a named insured on a homeowners policy? ›

A named insured is a person who's covered outright under a renters or home insurance policy – that includes the policyholder and anyone else living with them related by blood, marriage, or adoption.

When should I be named as an additional insured? ›

A person or group at risk of being sued due to a connection to the primary insured's business or operations should be added as an additional insured. Examples include a landlord added to a tenant's coverage or a contractor added to a subcontractor's coverage, among others.

Why would someone want to be listed as an additional insured? ›

Why would a company or person ask to become an additional insured? It boils down to larger businesses having less financial risk if something unanticipated happens. It may seem unfair, but it's a way for them to protect their own business in exchange for hiring the small business.

Why would a company want to be named as an additional insured? ›

You may ask to be named as an additional insured to provide your business with more liability coverage. For example, say you use a contractor on a project who causes an accident that leads to you being sued.

What does name of insured party mean? ›

An insured party is any person or entity that is legally qualified to receive insurance payments after a loss occurs. A named insured is a more specific term referring to individuals or companies listed on a policy's declaration page. Compare small business insurance quotes from top U.S. carriers.

Who is the insured on an insurance policy? ›

Insured is a person or legal entity whose financial losses are covered by the insurance policy. Under general and health insurance policies the insured is entitled to receive the benefit amount from the insurer for the covered financial loss.

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