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Co-Insured vs. Additional Insured: Which One to Choose and Why It Matters

Lowndes Leasing Lawyers

April 14, 2022

Andrew M. Gluck

Did you know that unrelated third parties (like a landlord and a tenant) should not be named a “co-insured” or even a “named insured” on another party’s insurance policy? In fact, the coverage provided to an unrelated third party in such cases could be denied by the insurance company based upon the insured’s actions.

Instead, the unrelated third party should be added as an “additional insured” and possibly the “loss payee,” if appropriate under the circumstances. Note that a contractual indemnity provision is required to support the unrelated third party’s coverage as an “additional insured.”

It is extremely important that the indemnity language in your lease be considered together with your insurance language. For example, if your indemnity language does not include attorneys’ fees and costs, the insurance coverage provided to the “additional insured” may not include attorneys’ fees and costs.

Additionally, coverage to an “additional insured” will not be broader than what is required in your lease, regardless of the amount of insurance carried by the insured. For example, your lease may require the tenant to carry one million dollars of commercial general liability insurance naming the landlord as an “additional insured.” If the tenant’s policy actually has limits of two million dollars, the landlord’s coverage could be limited to just one million dollars.

However, your attorney can employ some smart drafting techniques to ensure that the “additional insured” can take advantage of the full amount of coverage purchased by the insured, even if the lease calls for a lesser amount.

We recommend having your insurance language reviewed by your attorney together with your insurance provider on a regular basis.

This article is informational only. You should consult an attorney before acting or failing to act. The law may change rapidly and no warranty is given. LOWNDES DISCLAIMS ALL IMPLIED WARRANTIES AND WITHOUT LIMITATION, ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. ALL ARTICLES ARE PROVIDED AS IS AND WITH ALL FAULTS. Consult a Lowndes attorney if you wish to establish an attorney/client relationship.

Andrew Gluck focuses on real estate transactions, development, finance and commercial leasing work in the retail industry, among others. He provides his clients with technical and practical advice in connection with the acquisition, sale and leasing of commercial real estate of all types, including vacant land, shopping centers, entertainment complexes, office buildings, restaurants, hotels, and other retail projects.

In his practice, Andrew regularly assists clients in negotiating contracts for purchase and sale, performing due diligence, negotiating transfer documents and finalizing the closing of transactions. He has extensive experience handling the acquisitions and dispositions of large, multi-site portfolios throughout the United States.

An Ohio native, Andrew has lived in Orlando since 2007 and is committed to serving the community that has become his adopted hometown. Recognized with the Leadership Award by The Roth Family Jewish Community Center of Greater Orlando, his community involvement includes service on the boards of several organizations, including Boys and Girls Clubs of Central Florida, Jewish National Fund Orlando, Shalom Orlando and The Roth Family JCC. 

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