Meaning
Commercial insurance contracts utilize specific amendments to extend the protections of a policy to multiple parties who share an interest in a common asset or project. A joint insured endorsement adds a secondary entity, such as a customer or contractor, to the liability or property coverage of the primary policyholder. It protects the added party against covered claims but does not expand the total limits of liability of the policy.
Liability Allocation
Insurance brokers structure a joint insured endorsement to prevent the insurer from subrogating against a critical partner or client after a loss. This amendment ensures that both parties receive defense coverage and indemnity up to the policy limits. The endorsement must be reviewed to ensure it names the correct legal entity.
Coverage Dispute
Failing to secure a joint insured endorsement before beginning a joint manufacturing or construction project can lead to extensive legal disputes between the parties. If an accident occurs and the contractor is not covered, the project owner faces sole liability or a long court battle to recover damages. The cost of calling readiness without this endorsement is measured in uncovered claims and project delays.
Notice Provision
The insurer must notify all named parties of any joint insured endorsement changes.
