Does it matter which Insured is scheduled first?

The answer, as with so many things insurance, is “it depends.” The first Named Insured on a commercial policy has rights and duties that apply only to the first – not to any other Named Insureds on the policy.

These rights and duties are logistic. When several or even hundreds of insureds exist on a policy, some form of organization or coordination needs to apply. The policy chooses that only one party, the first Named Insured, will be responsible for the logistics. ISO form IL 00 17, and most insurer-specific and state-specific forms, use this model.

Typical rights and duties include:

• Cancellation

  The first NI may cancel the policy.

  If an insurer cancels a policy, notification must go to the first NI.

• Changes

  Only the first NI is authorized to make changes to the policy, with the insurer’s consent.

• Premiums

  The first NI is responsible for payment of all premiums.

  If the insurer returns premium, it will pay the amount to the first NI.

In terms of logistics, it makes sense that the 107^th insured listed on a policy should not be responsible for, or allowed to cancel a policy for all the other insureds. If that same 107^th insured needs to make a change, it may seem reasonable that Company 107 relays the request to the company. However, it is not practicable for the company to handle relations with each of the insureds individually.

For policies with a few insureds, the requirements for the first NI may be minute. But as the number of insureds grows, and as the interests sometimes diverge (not all may be wholly owned by the same parties), the rights and duties can grow in importance. This means that the proper organization as the first NI can be an important choice.