Which of the following is true regarding 'additional insured' status?

The correct answer highlights that 'additional insured' status extends limited coverage to the additional insured. This arrangement allows other parties, such as subcontractors or clients, to benefit from some aspects of the primary insured's liability policy. However, the coverage is not as comprehensive as that of the primary policyholder, meaning the additional insured’s protection is typically specific to certain instances or liabilities as outlined in the policy.

This status recognizes the need for certain stakeholders to have protection when they could be exposed to risks related to the primary insured's operations or actions. It's important to note that specifics of the coverage available to the additional insured will depend on the wording of the endorsement and the insurance policy itself. Therefore, while they do have some protection, it is less than what the main policyholder has.

Understanding this distinction is crucial for both the primary insured and the additional insured, as it shapes expectations about the extent and limitations of coverage in different scenarios.