Who is, or should be, included as an “insured” on your business liability insurance policy? This question is often misunderstood in the commercial insurance world. From a coverage standpoint, it’s essential that this issue be correctly addressed before a loss or claim.
In order for coverage to apply, the entity or person responsible for any loss must be an insured on the policy. Mistakes can happen in a variety of ways. For example, if the insured is operating as a sole proprietor and then forms a corporation or LLC and does not add the name of the new entity to the insurance policy, coverage could be forfeited. In other cases, crucial members of your operations may be erroneously left off.
Often, parties that are not automatically defined as insureds will request insured status. Such protection will include potential access to your insurance policy should a claim arise. In many cases, making another party an “additional insured” gives that party access to your policy and its limits, which could leave less money available to pay claims on your behalf. Thus, such requests should undergo serious consideration.
Consulting with your insurance agent or broker is essential in understanding the scope of coverage extended to any insured, so talk with us regarding your contracts and covered parties.
