Which statement about Additional Insured status is correct?

Which statement about Additional Insured status is correct?

• A. It does not make them a named insured, but shows they are covered
• B. It makes them the named insured
• C. It transfers ownership
• D. It modifies policy period

Answer: (A)

Additional insured status extends the named insured’s liability coverage to another party, usually a business or project client, under the policy terms. It allows that third party to be protected from claims arising out of the named insured’s work, without making that third party a named insured themselves. The policyholder remains the named insured, and the addition does not transfer ownership of the policy or change its period. It also doesn’t create named insured status for the third party or modify the policy’s fundamental terms beyond what the endorsement specifies. That’s why the statement that it does not make them a named insured, but shows they are covered, is the best description.

Additional insured status extends the named insured’s liability coverage to another party, usually a business or project client, under the policy terms. It allows that third party to be protected from claims arising out of the named insured’s work, without making that third party a named insured themselves. The policyholder remains the named insured, and the addition does not transfer ownership of the policy or change its period. It also doesn’t create named insured status for the third party or modify the policy’s fundamental terms beyond what the endorsement specifies. That’s why the statement that it does not make them a named insured, but shows they are covered, is the best description.