“Additional policyholder” refers to insurance coverage for someone other than the named policyholder, often required for legal or contractual reasons. Examples include covering drivers of insured cars and landlords of rented properties. Commercial general liability policies often name employees as additional insured, but coverage is limited to actions within their employment or business relationship. Policy terms should be carefully reviewed to determine coverage limits and the need for additional coverage.
The term “additional policyholder” refers to the cover provided by an insurance policy when circumstances require that someone other than the policyholder enjoy the benefits of the cover. The policy holder is the named insured and the policy will specifically state the circumstances in which persons other than the policy holder will be covered.
For example, in many countries it is a legal requirement that cars be insured. An automobile owner will arrange insurance coverage and the policy will regularly cover all legally licensed drivers that the owner permits to use the automobile. Without this provision, it would be very difficult for a company to provide a vehicle to an employee, as the employee would have to obtain separate insurance cover for the time spent driving the employer’s vehicle. Furthermore, it would be nearly impossible for private car owners to let anyone else drive their car. A related issue is the requirement that all lien holders be named as additional insured in the event of a claim.
Additional insurance provisions are also commonly found in property and casualty insurance. For example, someone renting a property will often be required to obtain casualty insurance and name the owner as an additional insured. Therefore, if a person is injured on the property, sues the tenant for negligence and adds the landlord to the lawsuit, the tenant’s insurance will cover the landlord’s liability. Similarly, homeowners who have taken out a mortgage to purchase the property are generally required to obtain homeowner’s insurance and name the lender as an additional policyholder.
Commercial general liability (CGL) insurance policies almost always have additional insurance provisions. For example, a CGL policy may name all officers, employees and agents of a company as additional insured, covering them for any act they perform in the ordinary course of their duties. However, this coverage does not extend to acts outside the employment or business relationship. For example, a company’s CGL policy might name all salespeople as additional policyholders, thereby covering sales agents for liabilities incurred in the course of selling the company’s product. However, sales agents who assume liability as a result of other actions unrelated to the sale of the company’s products are not covered by CGL’s policy.
This type of coverage is not the same in all cases &emdash; many policies state very clearly the limits of this coverage. Therefore, the best guide is always to read the specific policy terms carefully when determining the extent of coverage for additional policyholders and whether additional coverage should be obtained.
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