Library
Who is an Insured - Professional Liability
Professional liability policies provide coverage to the insured, but who is the insured? While the exact definition of insured varies from policy to policy, the general concept of insured is typically the same from policy to policy.
The definition of insured usually incorporates the following:
- The corporate entity, if any. The corporate entity is usually the insured named on the declarations page.
- Any director or officer of the corporate entity covered.
- Any past, present or future employee. However, most policies provide coverage to employees only within the scope of their employment with the insured corporate entity.
- Any affiliated companies that are either incorporated into the definition of insured or specifically named as additional insureds by endorsement. In many policy forms subsidiary companies are not automatically covered. Therefore the companies must be specifically named by endorsement in order to be covered.
- Independent contractors are not normally automatically covered in a professional liability policy. However, they can be covered on a scheduled or blanket basis by endorsement.
Directors and officers coverage and employment practices liability coverage provide coverage to a range of types of insureds, but the approach is not be exactly the same. In order to ensure the desired coverage is obtained, it is important to read your policy and consider your needs.
An example definition of insured is as follows:
"Insured" means the Company and any Insured Person. "Company" means the Named Insured set forth in Item X of the Declarations and any subsidiary created or acquired on or before the Inception Date set forth in Item Y of the Declarations. "Insured Person" means any past, present or future partner, principal, officer, director, member, trustee or employee of the Company.
Note that this definition does automatically provide subsidiary coverage. However, the definition of subsidiary is normally spelled out and is narrow. Affiliated companies that are not direct subsidiaries are not normally covered within the definition of subsidiary. In addition, this example definition of insured does not include independent contractors.
© 1999-2008 Mercator Risk Services | Legal Stuff
Designed and Maintained by ForeSite