Definition - What does Omnibus Clause mean?
An omnibus clause is a clause usually present in automobile liability insurance policies. It expands the coverage of the policy to include any person using or responsible for the use of the insured vehicle during an incident, so long as the person was granted permission to use the vehicle by the principal insured party.
Insuranceopedia explains Omnibus Clause
The omnibus clause permits the named insured to give permission to a permittee, who can then give permission to a third party (known as the second permittee) to use the vehicle. The most common example of this is a parent giving their child permission to use the car, and the child then allowing a friend to drive it.
The clause can refer to any member of the insured's household, as well as to any person using the automobile with the insured's permission or knowledge.