Nancy was an employee of Meriter Health Services. Between 1991 and 2004, she embezzled $500,000 from the Medical Staff of Meriter Hospital’s checking account.

Travelers denied coverage when Meriter Health Services presented the employee dishonesty claim.

Why? Because Medical Staff of Meriter Hospital was not a named insured.

The named insured is the most important part of any insurance contract. All coverage begins and ends with the named insured. If the named insured is not stated correctly, the coverage will also not be correct. Each entity specifically named as an insured has the same coverage rights and privileges. Under the Commercial Crime Coverage Form, the named insured must sustain a loss in order for coverage to apply.

The Commercial General Liability Coverage Form also provides coverage for only the named insured. However, there may be some confusion because the Who Is An Insured section adds a number of different persons and entities as insureds. It is very important to read the section carefully because it explains the relationship the person or entity must have with the named insured in order to be insured and that the insured status applies only within that relationship and for losses resulting from the named insured's operations.

Click here to review the PF&M analysis of the Who Is An Insured Section of CG 00 001 and CG 00 02–Commercial General Liability Coverage Forms.

The Homeowners policy also provides coverage for the named insured but coverage does expand to others. However, it is very important to understand exactly who is an insured. The named insured is only the individual named on the policy and that person’s spouse. When the spouse is not specifically listed, that spouse is covered only as long as he or she lives in the same household as the named insured.

Other persons are insureds but their relationship with the named insured determines their status as such.  

ISO updated the Homeowners program with an effective date of 5/1/2011. The PF&M analysis of that change is available. The following topics and others were updated as part of our analysis.

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