Legal Definitions - secondary insured

A secondary insured refers to an individual or entity who is covered under an insurance policy, even though they are not the primary policyholder who purchased the insurance. This coverage is typically extended due to a contractual agreement or a shared risk relationship with the primary policyholder. Being a secondary insured provides protection against specific liabilities or claims that might arise from the actions or property of the primary policyholder.

Here are some examples to illustrate this concept:

• Business Contract: Imagine a large commercial property management company, City Properties Inc., hires a landscaping company, Green Thumb Landscaping, to maintain its grounds. As part of their contract, City Properties Inc. requires Green Thumb Landscaping to list City Properties Inc. as a secondary insured on Green Thumb's general liability insurance policy. If a visitor trips over a sprinkler head installed by Green Thumb Landscaping and sues both companies, City Properties Inc. would be covered by Green Thumb's policy. This illustrates how City Properties Inc., as the secondary insured, receives protection from claims related to the landscaper's work, even though they didn't purchase the policy themselves.

• Rental Property: Consider a tenant, Maria, who rents an apartment from a landlord, Mr. Henderson. The lease agreement specifies that Maria must name Mr. Henderson as a secondary insured on her renter's insurance policy. One evening, a guest of Maria's slips on a wet floor inside her apartment, sustains an injury, and decides to sue both Maria and Mr. Henderson, claiming the landlord was responsible for a faulty fixture. In this scenario, Mr. Henderson is the secondary insured. Maria's renter's insurance policy would extend liability coverage to Mr. Henderson, providing him with legal defense and potential payout for claims related to incidents within the rented unit, protecting him from liability despite not being the primary policyholder.

• Event Planning: An event planning company, Elite Events LLC, organizes a large charity gala at a specific venue, The Grand Ballroom. The contract between Elite Events LLC and The Grand Ballroom stipulates that The Grand Ballroom must be named as a secondary insured on Elite Events' event liability insurance policy. During the gala, a piece of decorative lighting installed by Elite Events falls and injures an attendee. The attendee sues both Elite Events LLC and The Grand Ballroom. Here, The Grand Ballroom is the secondary insured. Elite Events' liability policy would provide coverage to The Grand Ballroom for legal defense and any judgments, protecting the venue from claims arising from the event organized by Elite Events.