What is the purpose of adding an additional insured to a policy?

• A. An additional insured is the insured's co-owner of the policy
• B. An additional insured is someone added to policy to receive liability protection beyond named insured
• C. An additional insured is the insurer's internal underwriter
• D. An additional insured is the beneficiary of the premium refund

Answer: (B)

Adding an additional insured is about extending liability protection to another party through the policy. By endorsement, that person gains coverage under the insured’s liability policy for claims arising from the insured’s operations or use of insured property, beyond what the named insured has alone. This is common in contracts—like a contractor asking a project owner to be listed as an additional insured so the owner has protection if the contractor’s work causes a loss. It’s not about co-ownership of the policy, it’s not the insurer’s internal underwriter, and it isn’t a beneficiary of any premium refunds. The core idea is to provide third-party liability protection under the insured’s policy.