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8 minute read Published on Jan 13, 2026 by BrokerLink Communications
Sometimes when you're reading over your insurance policy, it can feel like you're trying to decode a secret language. Terms like additional insured and additional named insured may pop up frequently, but what do they really mean? Canada’s insurance market is no small player on the global stage. In fact, according to Made in CA, Canada ranks ninth in the world for the total value of written insurance premiums, covering both life and non-life sectors. With so many policies out there, it’s essential for every policyholder to know the difference between these terms.
An additional insured is someone granted protection under another party’s policy. They benefit from legal defence and indemnity but don’t have decision-making power over the policy. On the other hand, an additional named insured has almost the same rights as the policyholder. For a more in-depth explanation of how these two differ in terms of coverage and when you might see these names in your policy, keep reading.
When you hear the term “insured status” in an insurance policy, think of it like the VIP list for coverage. It tells you exactly who is protected, how much protection they have, and under what circumstances. In Canada, you’ll typically come across three main types of insured status:
Named insured
Additional insured
Additional named insured
Here's a more detailed explanation of how they all differ, with help from the Insurance Bureau of Canada (IBC) glossary:
Named insured is the primary insured individual or organization specifically listed on the policy's declaration page, who holds full rights and responsibilities under that policy. They:
Own the policy
Choose the coverages
Receive all the important notices
Pay the premiums
In auto insurance, this is the vehicle’s owner or main driver. With home insurance coverage, it’s typically the homeowner. And in commercial liability coverage, it’s usually the business entity that needs protection.
Think of an additional insured as a special guest who is added to a policy for a particular purpose or event. By adding them, additional insureds have coverage extended to them through the “named insured's” policy. For example, if a contractor hires several subcontractors, the contractor might add the subcontractors as additional insureds to their liability policy with a blanket additional insured endorsement. Additional insureds may be named or unnamed. The additional insured gets limited coverage, usually just for certain activities, and they don’t handle policy upkeep or pay premiums.
An additional named insured is a person or entity that has nearly the same rights as the named insured. They’re explicitly listed in the policy, and they get notified of policy changes or cancellations. For example, in a business insurance policy, this might include affiliated companies. As for automobile or home insurance, it could be a spouse or co-owner.
Let's imagine you're planning a big event. Let's say it's a wedding. If you rent a venue for one day, you have access and certain protections during that time, but you’re not responsible for what happens before or after. That’s like being an additional insured. But if you own or co-own the venue, you’re in on all the decisions, responsible for maintenance, and liable for anything that goes wrong at any time. That’s more like being a named insured or additional named insured. It's essential to know the difference between these terms because your insured status can make or break how a claim plays out. Let's take a look:
A named insured generally takes on the most responsibility. They’re the ones who might get sued and who hold the main liability. Additional insureds are usually only protected for specific activities and have narrower coverage. In a commercial setting, this can mean the difference between being dragged into a lawsuit or walking away untouched.
Who gets legal defence and whose settlements are paid depends on insured status. In many cases, only named insureds and additional insureds for specific covered activities get legal defence from the insurance company, which can save tens of thousands in legal fees.
Named and additional named insureds get formal notice if a policy is cancelled or changed, giving them a chance to react. However, an additional insured might not hear about changes at all, leaving them to think they have some protection when in fact they have none.
Now that you understand what each term means, let’s explore why that tiny word “named” changes everything. Think of it this way: the word named is like getting your name printed on a house deed. You don’t just get to visit; you own a piece of the place and have a say in what happens. Here’s a side-by-side comparison to help you visualize it better:
Coverage
Full access to all policy coverages, including property, liability, and more. They’re basically a co-owner of the policy.
Limited to specific activities or events, usually only liability protection. Think of it as “guest access.”
Notification rights
Gets notified of policy changes, renewals, and cancellations. Can even make changes in some cases.
Usually no notification rights, so if the policy gets cancelled or changed, they might not know.
Premium responsibility
While they don’t always pay, they share some obligations and may be involved in claims and policy maintenance.
No responsibility for premiums or policy management. They are there for the protection, not the paperwork.
Let's give you an example. Say you were to rent out a hall for your company's next office function. Your company would be the named insured. Before the event, the hall asks you for a certificate of insurance (COI) as they don’t want to take on the added exposure or liability of your office function. The hall would then be added to your insurance policy as the additional insured with an additional insured endorsement. The coverage would only be valid for the duration of the office function, and a COI would be issued to prove that.
But if you were to start using that hall regularly for things like conferences, monthly office functions, or to co-host multiple large events throughout the year, the hall may ask you to list it as an additional named insured. Then, they'd receive full access to the same coverage as you, and they'd be kept in the loop about policy changes, cancellations, or renewals.
That said, listing a venue as an additional named insured is very rare, and often not in your best interest as the primary policyholder. It opens up your coverage (and potentially your coverage limits) much more broadly than most businesses realize. When adding someone to your policy, you need to think carefully about how much control and protection you’re willing to share. If you’re unsure whether someone should be added as an additional insured or an additional named insured, contact BrokerLink.
We get it. Insurance jargon can feel overwhelming. Yet these terms show up more often than you might think. To help make things clearer, here are a few real-world situations where you’re likely to see additional insured and additional named insured come into play:
If you run a business and lease a commercial space, your landlord will often ask to be added as an additional insured on your liability policy. This is because they want protection if someone gets hurt on the premises and decides to sue. In this case, the landlord doesn’t need broad policy control, just enough coverage to avoid being dragged into a tenant’s legal mess.
When a contractor hires subcontractors to work on a big projectsay, renovating an office tower, the main contractor might add the subcontractors as additional insureds on their general liability insurance policy. This protects both the contractor and subcontractors if they cause property damage or injury while on the job.
Imagine you're planning a big gala at a hotel ballroom. The hotel might ask to be listed as an additional insured on your event liability policy. This ensures they’re protected if, for example, a guest slips on the dance floor. The hotel doesn’t need to be part of your whole insurance package; they just want event-specific coverage.
When two businesses enter a joint venture or partnership, they might consider naming each other as additional named insureds. In this scenario, both parties share not only the profits but also the risks, so broader policy access and rights might make sense.
If two people co-own a rental property, both might be listed as named insureds or additional named insureds to ensure they both have full coverage rights and responsibilities.
Before you open the doors to your insurance policy and let someone else in, it’s important to ask the right questions. Adding another party, whether as an additional insured or additional named insured, can change your coverage, your risks, and even your premiums. Here are some questions to help you make a decision:
Question
Reasoning
What kind of exposure does this party create?
Are they involved in day-to-day operations, or are they just connected to a single event or project? The level of involvement determines the type of coverage they really need and how much risk you’re sharing.
Are they requesting additional insured or additional named insured status?
Clarify exactly what they’re asking for because that one word, “named,” can make a huge difference in rights and responsibilities.
What documentation is required?
Will they need a certificate of insurance, an endorsement, or a formal contract outlining terms? Make sure you understand exactly what paperwork is needed to keep everyone including your insurance company on the same page.
How long do they need to be covered?
Is this a short-term event, an ongoing project, or a permanent relationship? Duration can affect both cost and risk.
Will this affect my premiums or policy terms?
Some additions can increase your insurance costs or introduce exclusions you didn’t have before.
What are the potential long-term implications?
You'll want to find out if adding this party could open you up to unexpected liabilities in the future.
Not sure what to do? Talk to a licensed BrokerLink advisor to make sure your coverage works exactly how you need it to.
When it comes to protecting what matters most, you want a partner who truly understands the ins and outs of Canadian insurance. At BrokerLink, we've been helping individuals and businesses navigate complex insurance needs since 1991. That’s over 30 years of local expertise at your service.
Our licensed insurance brokers don’t just help you pick a policy; they guide you through every detail, including tricky endorsements and liability-specific adjustments that can make or break your coverage. Whether you need to add an additional insured for a one-time event or include an additional named insured for a long-term partnership, we’ll make sure you understand exactly what you're signing up for.
