Updated: 09 June 2023

What Does Insured Mean?

An insured is a party who is insured against specific perils by either being the holder of an insurance policy or by otherwise being covered. People, businesses, and other organizations commonly purchase insurance policies in order to become insureds. Being an insured enables the same party to receive financial compensation from an insurer if the former incurs a covered loss.

Insuranceopedia Explains Insured

A party does not necessarily have to be the policyholder in order to be an insured. For example, a construction company may purchase a liability policy that also names contractors who come to do work on the job site as insureds. In such a case, the construction company and the contractors it hires would be insureds. Insureds are only entitled to receive the exact benefits laid out in the policy. Thus, if the losses incurred exceed covered benefits, then the insured would be responsible for the excess losses.

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