Firearms Insurance Agent Blog

Additional Insured vs. Loss Payee

With many business insurance policies, there are additional insureds and loss payees. Both are third parties (either individuals or business entities) that can collect benefits from a policy, but what exactly is the difference between the two? Here we lay out everything you need to know about additional insureds and loss payees.

Additional Insureds

An additional insured is someone that is covered by the business’ insurance policy just as much as the policy owner. This is helpful in instances where the additional insured could be held liable for actions that are taken by the policy owner. For example, if you have a cleaning company coming in to clean your office, and someone gets injured in that office, both you and the cleaning company could be held liable. Your business insurance policy, however, would protect you both from a potential suit.

Loss Payee

A loss payee, meanwhile, is the first person an insurance company will pay claims to. This does not mean the policy owner. A loss payee is always paid first because they have an insurable interest in the property. For example, if you take out a loan to buy a car, and then get into an accident, an insurance company will make checks out to both you and your lender. This protects the lender from potential losses or unpaid loans.

At Associated Services in Insurance, we believe that it is vital that all firearms businesses have the right policies to fit their needs. To learn more about our services, contact us today.