When reviewing your Business Insurance declarations page one of the most important items to make sure that is absolutely correct is the name of the insured or insureds. Usually listing your corporate legal name will suffice for invoking coverage when a claim arises. It is usually prudent to also include all trade names (Doing Business As) so that there is no question as to whom the insurance contract is supposed to be providing coverage for. Sometimes where there are joint ventures, partnerships, or a common corporate ownership as a named insured, this can all present coverage questions down the road.
One of the axioms in insurance contracts is that you cannot sue or collect from yourself. Unless there is common ownership (50% or more) the insurance carrier will typically not allow multiple corporate names as a named insured. The usual exception to this rule is whereby an endorsement is issued on your policy providing additional insured coverage for a landlord, vendor, or some other entity via contract provisions. Most insureds do not realize that by adding a landlord or a vendor etc. as an additional insured on their insurance policy that it will normally prohibit each party from coverage being provided from the insurance due to mutual lawsuits against each other. This goes back to the primary axiom that we discussed earlier that you cannot sue yourself.
Some Business Insurance policies require that you specified the first named insured on the declarations page. The reason for that is at the insurance company will only send out notices of cancellations, change requests etc. to the first named insured. In theory, there could be hundreds of entities on the policy and it would be very cumbersome for the carrier to continually notify hundreds of entities every time a change is made on the policy. Therefore it is very important to make sure that the first named insured is the entity that has the authority and responsibility for making changes on the insurance policy.
Finally, with regards to the named insured’s on the declarations page the legal form of the named insured such as; sole proprietor, partnership, corporation, LLC, nonprofit, etc. needs to be spelled out so that it is written correctly within the policy. It is important to make sure that the appropriate corporate officer who is dealing with the insurance is designated by the corporate minutes, is the person who signs all of the documents with regards to the policy. It can cause legality issues for the insured, the corporation or for the insurance carrier if an unauthorized person is signing these legal documents on behalf of the insured and is not authorized to do so. Insurance contracts are legal documents and must be treated as such with the administration and execution of the forms and endorsements.
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