Insured

What Does Insured Mean?

An insured is a party protected against specific perils, either as the holder of an insurance policy or through other coverage. Individuals, businesses, and organizations commonly purchase insurance policies to become insured. As an insured party, they are entitled to receive financial compensation from the insurer if they experience a covered loss.

Insuranceopedia Explains Insured

A party does not necessarily need to be the policyholder to be considered an insured. For instance, a construction company may purchase a liability policy that also names contractors working on the job site as insureds. In this case, both the construction company and the contractors it hires would be insureds. Adding extra parties as insureds is standard practice on general liability insurance for construction firms, since project owners and lenders often require it before work can begin. Most contractors still carry their own independent contractor insurance to cover work or claims that fall outside someone else’s policy. Insureds are only entitled to the specific benefits outlined in the policy. Therefore, if the losses incurred exceed the covered benefits, the insured would be responsible for the excess losses.