Which aspect is true about coverage limits for additional insureds?

When considering coverage limits for additional insureds, it's important to understand the typical structure of insurance policies. Additional insureds are often added to a policy to provide them with coverage under the existing terms and conditions of that policy, but they typically do not enjoy the same level of protection as the named insured.

Additional insureds usually have lower limits than named insureds because the primary coverage is intended to protect the named insured—the individual or entity that owns the policy. Since additional insureds are secondary in nature, their coverage often reflects a more restricted scope and lower limits, ensuring that the main insured retains greater liability protection.

This approach helps to manage risks and the overall premium considerations of the policy. It also emphasizes contractual relationships, where the named insured often has significant responsibilities and exposures that warrant broader coverage. Thus, understanding this hierarchy in coverage limits highlights why additional insureds typically receive less coverage than named insureds.