Additional Insured

Additional insured is a term used in the auto insurance industry to describe a status given to an owner of the vehicle, which allows for coverage in the event of suit. A common example is the requirement of drivers of leased vehicles to name the leasing company as an additional insured in the event of an accident resulting suit. Since the leasing company owns the vehicle, the plaintiff in a suit would name the leasing company as a defendant for damages. Being an additional insured limits damage costs incurred by third party entity in the event of collision involving the third party's vehicle under the control of the defendant driver.

Fast Facts

  • Aside from the automobile insurance industry, construction and building contractors also regularly utilize additional insured status.
  • Additional insured status does not limit liability per se, but covers costs of damages associated with any judgment of fault or liability.

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