When You Need Additional Interest vs. Additional Insured (2024)

FAQs

When You Need Additional Interest vs. Additional Insured? ›

Most insurance carriers allow you to add additional interest or additional insured parties to a variety of different insurance policies. The main difference between these two is that additional insureds are covered under the policy and additional interests are not.

Additional insured is only available to owners of the property looking to gain the financial benefits and protection that homeowners insurance can provide. 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.

Listing a landlord as an additional insured is — in most cases — a bad idea. It essentially extends your coverage to them, which can lead to confusion if a claim needs to be filed. It's a better idea for a landlord to be listed as an additional interest.

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.

If limited coverage and rights under the policy are sufficient, an additional insured endorsem*nt is likely the way to go. If the goal is to obtain complete and distinct coverage from all potential liability, being included as an additional named insured is your best bet.

Likewise, if you're a personal trainer who sometimes holds sessions at a gym, the gym may require you to add their location as an additional insured. That way, if there's an accident, the gym is protected by your policy.

The benefits could include the right to legal representation against third-party claims or coverage for damage caused. As an additional insured, they'll be able to keep losses off their history and protect their premiums.

Typically, an additional named insured will be someone close to the policyholder or relevant to their business dealings. For example, a co-owner, vendor, or family member are some common examples of secondary and additional named insured parties.

Sometimes, a landlord insurance policy will add a property management company as an additional interest. That is different than additional insured. They kind of sound the same but additional insured means the property manager is covered under the liability section of the policy.

While the SOP does not specifically outline the amount of general liability insurance required, most borrowers have $1,000,000 coverage for each occurrence and $2,000,000 in the aggregate. Lenders should be named as an additional insured on the general liability insurance policy.

What are the risks of adding 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.

Your insurance company will likely refuse to add your client as an additional insured. It will argue that your client is not a licensed design professional, cannot be held to the standard of care of such a professional and therefore cannot be insured under the policy for negligence acts, errors or omissions.

Additional insured: Any additional insured under any policy of underlying insurance should automatically be an insured under the umbrella policy. The coverage isn't any broader than the coverage provided by the underlying insurance. 5.

In the event of a loss, the named insurer is the person that the insurer writes the check to in the event of a loss. Additional drivers are a different matter. An additional driver is a person who resides with the named insured and/or regularly uses a shared vehicle.

The 'Named Insured' is like the primary builder who uses the blueprint directly to construct a building (and claim benefits). The 'Interested Party' is like a neighbouring property owner. They don't build from the blueprint, but they care that the structure is sound because it impacts their adjacent property.

In an insurance policy, an additional insured refers to anyone other than the policyholder who is covered by an insurance policy. Coverage might be limited to a single event or it could last for the policy's lifetime.

An additional interest sometimes referred to as an interested party or a party of interest, is a third party who benefits from knowing an insurance policy is in place but doesn't need the coverage. Additional interests that are added to insurance policies are notified when changes to the policy are made.

The 'Named Insured' is like the primary builder who uses the blueprint directly to construct a building (and claim benefits). The 'Interested Party' is like a neighbouring property owner. They don't build from the blueprint, but they care that the structure is sound because it impacts their adjacent property.

The short answer: The additional insured has access to your insurance coverage, while the certificate holder only knows about your coverage. Notice how the insured definition above can cover you, your business, and anyone else working for or representing your business.