Understanding that the "Named Insured" is the insurance contract is issued in the name of an individual or a firm. The person or firm whose name appears on the insurance contract and whose interest are protected under the policy is referred as the named insured. In some cases, more than one person or more than one entity can be specified as named insured in insurance policy documents.
People often get confused with named insured and additional name insured. The named insured is real owner of the policy. An entity or an individual who is insured in the policy declaration along with the first named inured is referred as additional named insured. An additional named insured is generally added after the policy is written.
The additional named insured enjoy same rights and shoulder same responsibilities as the first named insured. However, the additional named insured will not be able to enjoy the rights that are exclusively reserved for the first named insured. Having an additional named insured means sharing responsibilities and rights.
Rights of first named insured: The standard insurance policy provides specific traditional rights to the named insured such as right to coverage( including defense and damages), the right to cancel policy, the right to make changes in policy, right to receive any return premium, right to receive notice of material change, non-renewal or cancellation.
Duties of first named insured: The insurance policy also imposes different duties on you as first named insured. The different duties that you are required to discharge are duty to pay premium, submit to oral examination, file claims, proof of loss, and execute other claim related duties.
If you own a property or have a financial stake in a property, you should always opt for a named insured status in homeowners insurance. This is important because the first named insured is the primary recipient of any possible claim benefit or any liability protection amount.
In general, the additional named insured are those individuals or entities whose operations are closely tied with the party (individual or entity) who is named insured. By adding an entity in the list of additional insured, the first named insured extends the liability coverage to all the operation of the additional named insured (entity).