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Who Is An Insured?

Who Is An Insured?

When purchasing insurance for your business, the application will ask for the name of your company. Typically what you will put there is the company’s corporate name, as well as any “Doing Business As” (dba). That determines the “insured” party on the policy.

Did you know that on many policies the “insured” can be more than just the business? In fact, coverage may extend further than you think.

It Depends on Your Corporate Structure

The typical Commercial General Liability Coverage Form (CG 00 01) reads as follows:

In every instance, the company is covered, as well as the decision makers within the company, depending on the structure. However, they are covered only as it relates to their duties and/or conduct within the operations of the business that is being insured.

But Wait, There’s More

The CGL policy goes on to state:

As with directors, officers and the like, conduct of employees and volunteers must be related to the business in ordered to be covered. In addition, bodily injury or personal advertising injury caused by these individuals to owners, managers, directors, other employees or volunteers is not covered. Any property damage to company owned property by these individuals is also not covered.

Anything Else?

Actually, yes, there is more. The policy also extends coverage to newly acquired or formed organizations as named insureds, except for these types:

  1. A partnership.
  2. A joint venture.
  3. A limited liability company.

These types of companies must be added to the policy right away.  Any other organization will have automatic coverage for up to 90 days from the date it was formed or acquired. No coverage is offered to any organization type prior to the date of acquisition or formation.

Is There Coverage for Subsidiaries?

As stated above, the policy will extend to cover certain newly acquired or formed organizations for up to 90 days. Any other organizations must be named on the policy, even if they have common ownership and common business operations. They must be named on the policy especially if they have no coverage elsewhere.

The best way to make sure there is coverage for any subsidiaries or related companies is to name them on the policy and have their operations included in the premium calculations. To be sure you’re covering everyone you are supposed to be covering, talk to your Hayes Broker about scheduling a risk management analysis.

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