In the insurance world, there are cases where more than one person or organization may have an insurable interest. An insurable interest just means that there could be a financial loss for a person or organization.

For example, if you have an auto loan or a mortgage, the lender has an insurable interest, which makes the lender eligible to be listed on your insurance policy as an additional insured. The insurance policy protects you, but it also protects the lender.

Additional insured are also common with business insurance. A contract may stipulate that one party name another party as an additional insured on the first party’s business insurance policy. When two businesses or a business and contractor are working together, the actions (or inactions) of one party can create a liability risk for the other. In other words, someone might do something or fail to do something, with the result being a costly lawsuit.

A commercial landlord is another common example of an additional insured. What you do or don’t do at your place of business can have a financial impact on the landlord, so they can request to be listed as an additional insured. Some business insurance policies build in coverage for landlords and contractors. In other cases, they have to be added to the policy as an additional insured, as needed.

Additional insureds can request a certificate of insurance, which is a document that lists basic coverages and effective dates and also lists the additional insured on the policy. It’s also common for additional insured parties to receive a notice of cancellation if your policy is cancelled.

For example, auto lenders and mortgage companies typically receive a notice of cancellation if you change insurers. If the lender receives a notice of cancellation before receiving proof of coverage from your new policy, you can be sure that they’ll reach out to you. There’s no cause for alarm in this case, however. Just reach out to your agent or broker if you have questions — but in most cases, all the lender needs is a copy of your declarations page from your new policy.

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