Who Is An Insured Under A CGL Policy?

The first thing you should do as a business or property owner is to make sure that you are insured against any damages or losses that might affect your company. These damages and losses can include losses from within the company itself, or it might come from third-parties who are affected by the loss occurring.

The insurance company agrees to pay amounts the insured is legally obligated to pay as damages for bodily injury and property damage that this insurance covers. It also has the right and duty to defend the insured against any suit that seeks those damages but only those suits that seek damages that this insurance covers.

Your commercial general liability insurance should generally cover what's called the named insured, whom are the parties that are mentioned within the insurance policy's contract. The named insured entity on the declarations determines who is an insured:

• Individual - The individual and his or her spouse are insureds but only for conduct of a business the named insured solely owns.
• Partnership or Joint Venture - The partnership or joint venture and its members, partners, and their spouses are insureds but only for conduct of the business.
• Limited Liability Company - The limited liability company (LLC) is an insured. Members are insureds for conduct of the business. Managers are insureds with respect to their duties as managers.
• Organizations other than above - The organization is an insured. Executive officers and directors are insureds but only for their duties as such. Stockholders are insureds only with respect to their liability as stockholders.
• Trust - The trust is an insured. Trustees are also insureds but only to the extent of their duties as trustees.

It's pretty easy to figure out who the named insured people are on the policy: Usually all you have to do is take a look at the policy's documents, and the named insured will be right there - well, named, on the contract.

As for anyone else, the automatic insureds will include anyone who is associated with the named insureds mentioned above. Here are some examples for who might be considered an automatic insured according to a general liability insurance policy:

• Volunteer workers when performing duties related to conduct of the business. This is subject to certain conditions, exceptions, and exclusions.
• Employees, other than executive officers or managers, but only for acts within the scope of their employment or while they perform duties related to conduct of the business. This is subject to certain conditions, exceptions, and exclusions.
• Any person or organization that acts as the named insured's real estate manager.
• Any party that has proper temporary custody of insured property if the named insured dies. However, this status applies only until a legal representative is appointed.
• The named insured's legal representative if the named insured dies, with respect to the duties as such. The legal representative assumes all of the deceased named insured's rights and duties. This goes beyond the standard insured status and extends to rights to cancellation, conditions, and other elements assigned to only named insureds.
• Newly acquired or formed organizations are named insureds for not more than 90 days. This applies only if the named insured either owns or has a majority interest in the organization. The newly formed or acquired organization cannot be a partnership, joint venture, or limited liability company. This provision is limited to not more than 90 days after the organization is formed or acquired, or until the end of the policy period, whichever comes first.