This is an important consideration for any type of policy but is a serious concern as respects liability policies. Insurance policies only provide coverage to the people or entities that are either specifically named on the policy or included for automatic coverage within the definitions used by the insurance policy’s forms or endorsements. When a claim occurs, you don’t want to discover there is no coverage because a party who should have been named wasn’t included or didn’t qualify under the policy’s definition of “Insured”.
Naming insureds properly is also important for property policies. If the owner of the property, or another party with an insurable interest in the property is not named, there is no coverage.
While some policies include automatic coverage for Insureds not specifically listed, this depends on the type of policy involved and the specific forms used. For example, the standard ISO General Liability form (CG 00 01) includes the following besides those listed:
– Spouses if the named insured is an individual or partnership
– Executive officers or members of an LLC
– Employees and volunteer workers (but no coverage for claims made by their family members)
– Real estate managers
– Legal representatives with temporary custody of your property following your death
– Any newly acquired organizations for up to 90 days (limitations apply)
Coverage for the above is always limited to their conduct involving the business.
Workers compensation policies, in contrast, have basically no coverage for any parties other than those specifically listed on the policy. Auto policies have their own definition which typically includes anyone the named insured permits to drive the car.
Also, many carriers use their own proprietary policy forms. These may offer broader — or narrower — coverage when it comes to who is a named insured. So, it is important that you review your policy to see if it meets your needs.
There are also endorsements available that will make an outside party an insured for specific and limited situations. These could include your landlord of the space your renting — they would only be an insured with respect to your status as a tenant of that property. Or, a contractor may need to make the property owner or general contractor an “additional insured” on a job they’ve been hired to do.
As you can see, this can be a complex subject. Make sure you discuss this issue in detail with your insurance broker so your policies can meet your needs.