Tuesday, April 27, 2010

additional insured

Being named as an “additional insured” allows someone to be protected from liability under another person’s or company’s insurance company. When an entertainer like Britney Spears appears at the Hard Rock Café, she (probably through her lawyer) requests, as a condition of her contract, that she be named as an additional insured under the Hard Rock’s liability insurance policy. That way, if anyone is injured during her show, the insurance policy will protect her—along with the club—from liability. Similarly, a toy designer will want to be named as an additional insured under a toy company’s product liability insurance.
How is it done? A contract clause—commonly entitled “Insurance”—establishes the type of insurance required, the amount of coverage, how proof will be provided that the party has been named, and other details. These clauses can be quite lengthy. Below is an example of an abbreviated version.
EXAMPLE. Insurance. Company shall obtain and maintain during the term of the agreement, at Company’s sole cost and expense, standard product liability insurance coverage naming Customer as an additional insured.

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