What is a common limitation that additional insureds face?

An important aspect of additional insured status is that while these entities receive coverage under another party's insurance policy, the coverage they receive is typically limited compared to the primary insured. This limitation means that additional insureds may not have access to the full scope of protections available to the primary insured. For example, the primary insured might have endorsements or more comprehensive liability coverages that do not extend to additional insureds. This limitation is particularly relevant in liability insurance, where additional insureds generally receive protection only for liabilities arising from the actions of the primary insured.

Understanding this distinction is crucial for all parties involved, as the extent of coverage dictates the risk each party is willing to assume and manage. This nuanced coverage aspect can impact how claims are handled and which parties are ultimately liable in a given situation.