Many liability insurance policies cover, as named insured’s, only the persons or entities listed on the policy or in an endorsement. Failing to advise your insurance agent of all the names you may operate under can be the difference between having coverage or no coverage.
It is important for you to advise your insurance agent of your legal business name and any DBA’s (Doing Business As) or other names you operate under. For example, suppose that Dean’s bakery is a wholly-owned subsidiary of Dean’s Incorporated however the liability policy that covers Dean’s Incorporated does not include Dean’s bakery in the policy and a customer files a lawsuit against Dean’s bakery for bodily injury. The suit is unlikely to be covered under Dean’s Incorporated’s insurance policy because Dean’s bakery was not listed as an insured.
Listing all of the names that your company operates under generally costs nothing to list, but it is a common mistake or oversight when applying for coverage by business owners. Some policies will provide temporary coverage for newly acquired entities or newly formed companies that the named insured is a majority owner of, but that is generally limited to 90 days. This type of mistake often comes up with real estate where there is multiple owners on the deed and the person that purchases the insurance fails to provide all the names of the various parties with ownership, leaving several people without coverage.
Each policy differs slightly in how they handle named insured’s, but it is recommended that you review your policy to make sure all of your names are listed either on the declarations page or on an endorsement to assure that you are properly protected. An annual review with your insurance agent of the coverages limits and operations of your company as well as the names will help prevent any gaps in coverage.
Some carriers will offer a broad named insured endorsement that provides automatic coverage for all entities which the named insured owns more than a 50% interest in. This avoids the necessity of listing every organization or name and provides automatic coverage.
For more information or questions contact our office.