AQOL Archive back to AQOL Archive   What is the difference between an Additional Insured and an Additional Named Insured in a General Liability policy? These terms are often used interchangeably. When we tried to answer this question, we also had a tough time making this distinction. Here are some tips for managing Insureds under a CGL policy. Make sure the client is correctly classified as an individual, partnership or joint venture, or corporation, as these classifications affect who may be an additional Insured. Subsidiary companies are covered if they are disclosed and scheduled. Make sure you know ALL the operating entities that your clients own and operate, as well as any dormant or discontinued operations. If the Insured enters into a joint-venture agreement with another party, you must disclose the joint-venture to the Insurer. Automatic cover is usually granted for newly acquired or formed corporations but you must notify the Insurer of the new entity within the time limit, usually 60 or 90 days. New joint ventures or minority interests do not enjoy this automatic cover. Managed companies and companies in which the Insured has a minority or non-control interest are not insured unless they are disclosed and scheduled. Similarly, if the Insured enters into a joint-venture agreement with another party, you must disclose the joint-venture to the Insurer. Executive officers and directors are Insureds, but only with respect to their duties. Employees are also Insureds but only for acts within the scope of their duties as such. Coverage for employees is subject to an exclusion for injury to co-employees and several other special exclusions. Contract workers, who are by design not employees of the Named Insured, do not enjoy the automatic protection afforded to employees. For non-profit organizations, you may wish to amend the standard policy to cover elected officials, volunteers and members. Don't sign an insurance certificate, especially a non-standard certificate, without the express consent of the Insurer. If you make an error in a certificate, you may exceed your binding authority and the Insurer may look to you for any losses they pay out. Remember that the Insurer will usually seek deductible reimbursement from the Named Insured, not the additional insured. This is especially important if the policy carries a larger than average deductible. If the Named Insured enters into a contract with an additional insured, inspect the contract to ensure that any indemnity or hold-harmless clauses are consistent with prudent business practice and that you can fulfill any insurance requirements or specifications. A business client, landlord or other outside interest may be added to the policy, but usually only with respect to liability arising from the property and operations of the Named Insured's. If the additional Insured is only concerned with the Named Insureds product liability exposures, consider a Vendors Liability rider. Business contracts may require you to extend the policy to include cross liability, which expressly permits an action by one Insured, whether named or otherwise against another Insured under the same policy. Sometimes a subrogation waiver may also be required. Remind your client that the Insurer will seek deductible reimbursement from the Named Insured, not necessarily an "at fault" additional insured. This is especially important if the policy carries a larger than average deductible. An additional Named Insured or an additional Insured may not change or cancel the policy unilaterally, even if they have contributed to the premium. On the other hand, the Named Insured may cancel without the consent of other Insureds. Similarly the Insurer may cancel the policy, for example for non-payment of premium, by delivering notice of cancellation solely to the Named Insured. Other insureds will receive notice of cancellation only if the Insurer has previously agreed to provide such notice, either by certificate or endorsement to the policy. If a certificate is issued for information only and imparts no express rights under the policy, then the party may require an endorsement adding their interest to the policy. If your agency agreement doesn't permit you to sign standard certificates, then seek the Insurer's written permission to do so for an individual client, class of client or program. If a certificate of insurance provides notice of cancellation, you must send a copy of the certificate to the Insurer. If the policy is subsequently cancelled, say at the instructions of a premium finance company, you may be held liable if certificate holders are not notified promptly.

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