Insured

While the terms are often used interchangeably, insured, named insured, and policyholder don’t always mean the same thing.

• A policyholder is the person or business that owns the insurance policy. They can make changes to the policy, such as adding coverage, updating business information, or canceling the policy.
• Named insureds are individuals or businesses listed on the policy declarations page. This is usually the business itself.
• An insured is anyone who is protected under the policy, which can include the named insured, employees, additional insureds, or others covered by the policy terms.

For most small businesses, the policyholder and named insured are the same, but that isn’t always the case.

General liability insurance and business owner’s policies (BOPs) generally have multiple insureds. Listed in the policy section titled “Who is an insured?”, you'll generally see company employees, executives, volunteers, and others. However, insureds only receive insurance protection while fulfilling their duties on behalf of the named insured.

Some examples of when a party is insured or not insured include:

• A landscaping business owner is the named insured. Additionally, employees using company equipment are also insured while performing job duties.
• A cleaning company adds a commercial client as an additional insured to meet a contract requirement.
• A delivery driver is insured under a commercial auto policy while driving a company-owned vehicle for business purposes.
• A customer injured on your property isn't an insured—they're a claimant who may file a liability claim against your policy.

An additional insured is a person or organization that's added to your insurance policy and receives limited coverage under it.

Small business owners are often asked to add additional insureds, such as:

• A client who hires you for a job
• A landlord who leases you commercial space
• A general contractor hiring your business as a subcontractor

Adding an additional insured typically protects that party only for claims related to your work, not for their own unrelated actions. This is a common contract requirement and usually requires an endorsement to your policy.

Being listed as an insured doesn’t guarantee coverage in every situation.

Coverage often applies only when the insured is acting on behalf of the business, for example:

• Employees may not be covered for actions taken outside of work duties.
• Owners may not be covered for personal activities unrelated to the business.
• Additional insureds typically receive limited coverage tied to your services, not their own operations.

Policy exclusions and conditions still apply, so it’s important to review your policy carefully.

Understanding who is considered an insured can help you:

• Meet contract and client insurance requirements
• Avoid gaps in coverage
• Know who is protected if a claim occurs
• Provide accurate certificates of insurance

This is especially important for small businesses that work with clients, vendors, landlords, or subcontractors.