What is a named insured?
In insurance, a named insured is the person or business listed on the first page of an insurance contract — the one who buys and manages the policy, pays the premiums and typically receives the broadest protection under it. They’re also called the policyholder or primary insured.
For most small businesses, that’s the owner or legal entity responsible for the day-to-day coverage decisions — like a contractor, consultant or LLC.
For example, if you own a restaurant called Tom’s Tacos Inc. and purchase business insurance for it, Tom’s Tacos Inc. would be the named insured.** A policy can include more than one named insured, such as co-owners or business subsidiaries. In this case, your personal name could appear after your company’s.
Knowing who the named insured is helps you understand who’s ultimately responsible for the insurance policy — and who has the broadest protection if something goes wrong.
The named insured can usually make key decisions — like changing coverage limits, adding or removing insured parties or updating contact information.
If there’s more than one named insured, the first one listed — called the first named insured — generally manages the policy and receives official notices from the insurance company.
Understanding this distinction can help you avoid confusion and make sure the right person or business has control over your coverage.
A named insured can also add other people or businesses to their policy in two ways: as an additional named insured or an additional insured.
Compare named insured, additional named insured and additional insured
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Named insured
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Additional named insured
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Additional insured
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Who controls the policy?
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The business or person who buys the policy can make changes, file claims and pay premiums
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Added through an endorsement. Cannot change the policy or manage coverage
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Added through an endorsement. Cannot change the policy or manage coverage
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What’s covered?
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Typically receives all protections under the insurance policy
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Typically receives all protections under the insurance policy
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Coverage is limited to incidents connected to the named insured’s work or operations
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Who could be on the policy?
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Business owner, LLC or main policyholder
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Business partners, co-owners or family members who share the same responsibilities and risks
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Clients, landlords or contractors who want protection related to your work
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When are they added to the policy?
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When the policy is first issued
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After the policy starts, via an endorsement
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After the policy starts, via an endorsement
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Example
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A cleaning business that purchases its own general liability insurance policy
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The cleaning company’s brother starts a second location of the business and gets added to the same policy
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A property manager is added to the cleaning company’s policy to help protect against claims tied to the cleaner’s work
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What’s the definition of an additional named insured?
An additional named insured is a person or business other than the named insured who may share the same protections under the insurance policy. They’re often added after the policy begins, usually through an optional add-on to the policy, called a rider or addendum to the contract.
At most insurance companies — including NEXT — an additional named insured isn’t responsible for paying premiums and can’t modify the policy, but they’re notified about important updates such as renewals or cancellations.
Some insurers give additional named insureds rights similar to the primary policyholder, while others limit those privileges. It’s always best to check with your insurer to confirm what applies to your policy.
When would you add an additional named insured?
For small businesses, this setup is common when business partners, co-owners or family members share equal stakes — making sure both are protected under one policy. For example, if two people own a landscaping company together, one might be listed as the named insured and the other as an additional named insured.
This status helps extend the same protection to closely connected individuals or entities that share the same risks and responsibilities.
What does an additional insured mean?
Not to be confused with an additional named insured, an additional insured is a person or business added to an insurance policy — usually after the policy begins — through an endorsement or rider.
Business owners often add an additional insured to help protect clients, landlords or project partners from certain claims that may arise from their work. This is typically done using an additional insured endorsement, which becomes part of the policy contract.
An additional insured is also covered by the policy, but with limitations. Coverage generally applies only to incidents related to the named insured’s work or responsibilities.
When would a small business add an additional insured?
Many small businesses add additional insureds to meet contract requirements. Common examples include:
- A client who wants to be listed before work begins.
- A landlord requesting coverage in a commercial lease.
- A general contractor adding subcontractors before starting a job.
These requests are meant to help protect the other party from claims tied to your work — not to extend full control of your policy.
What coverage does an additional insured typically have?
An additional insured can help protect another party from someone else’s injury or property damage claims connected to the named insured’s work.
For example, if a property owner asks to be added as an additional insured to a general contractor’s liability policy during a renovation, and a visitor trips on a power cable and gets hurt, both the contractor and the property owner could be sued. The contractor’s general liability coverage could help cover the property owner in this case because the injury was related to the contractor’s work.
However, if the visitor sued the property owner for something unrelated to the renovation, the contractor’s policy likely wouldn’t apply.
Additional insureds don’t pay premiums and can’t modify the policy, but they may receive notice of policy changes or cancellations.
An additional insured usually has narrower coverage than an additional named insured. While an additional named insured may share many of the same rights as the policyholder, an additional insured’s coverage only applies to specific work-related situations.
For instance, if a property owner is listed as an additional insured on a contractor’s policy, they may be protected for claims tied to the contractor’s work — but not for unrelated incidents.
