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Legal Definitions - insured
Definition of insured
The insured refers to the individual or organization whose life, health, property, or potential liabilities are protected by an insurance policy. When a covered event or loss occurs, the insured is the party that experiences the financial impact, which then obligates the insurance company (known as the insurer) to provide the agreed-upon benefits or compensation. It's important to note that while the insured is often the person or entity who purchased the policy (the policyholder), they can also be another person or entity specifically named or covered under that policy.
Example 1: Auto Insurance
Sarah purchases an auto insurance policy for her car. One day, she is involved in a minor fender-bender. In this scenario, Sarah is the insured because her vehicle and her potential liability for damages to the other car are covered by the policy. When the accident occurs, the insurance company will process her claim and pay for the repairs or damages as per her policy terms.
Example 2: Health Insurance for a Family
John has a family health insurance plan through his employer that also covers his spouse, Maria, and their children. When Maria needs to visit a specialist for a medical condition, she is considered an insured under John's policy. Even though John is the policyholder who arranged the coverage, Maria's health expenses are protected by the same insurance plan.
Example 3: Business Property Insurance
A small manufacturing company, "Widgets Inc.," buys a commercial property insurance policy to protect its factory building and equipment. After a severe storm causes significant damage to the roof and machinery, Widgets Inc. is the insured. The company experiences the loss, and its insurance policy will cover the costs of repair and replacement, allowing the business to recover financially.
Simple Definition
An insured is the person or organization whose life, health, or property is covered by an an insurance policy. When the insured experiences a covered loss, the insurer is obligated to pay the policy's proceeds. While often the policyholder, an insured can also be someone else protected by the coverage.
