Anyone other than the policyholder who is also covered by the policy. It is common for locations/venues to require that they are named additionally insured on your policy.
There are, however, limitations to the coverage provided to the additional insured. A common misconception with additional insureds is the belief that if they are named as additional insured on a policy, they don’t have to worry about buying their own insurance. However, an additional insured only has protection under your policy if they are not responsible for the claim. They would not be protected under your policy if they were at fault for a claim.
The reasoning behind this is simple. If you are responsible for a claim, your own insurance should provide protection, including providing protection for the additional insureds. If an additional insured is responsible, their own insurance would have to provide them coverage. If you are both equally or partially responsible for the same claim, then each would rely on their own insurance for protection.
Example 1: You are promoting a festival and name Great Beer Company on your policy as an additional insured as required in your sponsorship agreement. Through no fault of Great Beer, a patron slips and falls and brings suit against you and Great Beer. Your policy would provide coverage for Great Beer.
Example 2: Same scenario as above. But instead of a slip and fall, a patron becomes ill from drinking a bad batch of beer manufactured by Great Beer and sues both you and Great Beer. Your policy would protect you, but would not provide protection for Great Beer. They would have to rely on their own insurance.
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