Building and Autos in the personal name(which is not a N.I.)

[rcenters]

This is actually two questions in one, they just happen to be the same issue but for different policy types.

If we have a building owned in the personal name, which is not a named insured, isn't this a coverage gap? As I'm sure you are aware, many insurance companies will not combine the personal name with a business entity. That means in order to get named insured status you have to put the building on a separate policy with the personal name as named insured. This, of course, means more premium since you're buying two liability policies and you get the minimum premium twice.

Naturally, I'm talking about low premium situations; in this particular case, the premium is about $1000, but it's likely to go up to $1400 if written across two policies, which will of course make the customer unhappy. But the point of me asking this here is, there's not a consensus at my agency about whether it's necessary to do that. It's difficult for me to recommend to our customer writing the policies this way if the account's producer isn't in agreement, so I want to make sure that I'm not overanalyzing this.I have never personally seen a claim where either of these issues was raised, so I can't use that. I have been able to Google for a couple of vaguely related articles that support my position, but what I really need to drive the point home is some actual case studies of claims denied, and even better if they sued the insurance company and the court upheld the denial.

Just to be clear, this would be a situation where "ABC Company LLC" has a policy where ABC is the sole named insured. The LLC Member(the owner) however, has the building deeded to his own name. Would a claim adjuster not have grounds to deny a fire claim, despite the ownership connection with the LLC? And for a liability claim, is it not very possible that a liability suit could leave the business defended, but the individual person not?

Also, same question for autos.

[NYagent301]

Never had a problem combining named insureds as long as there is common ownership. Either put it in as Named Insured or the building owner as Additional Insured - Managers/Lessors. In the latter there does not have to be common ownership, and would apply if for instance the client had a triple net lease and is responsible for building coverage. The only advantage to a separate policy is you can stack liability limits. On a single policy double the limits, and discuss with your insured. You should ALWAYS have all necessary insurable interests covered, not sure what companies will not do this, look somewhere else for ones that do. To your question, pull a copy of a policy to determine "who is an insured".

[rcenters]

I haven't run into many companies that won't do this in GL/Property, but there are several that won't do it on Auto. As for the one that won't do it for BOP in this case, yes it's possible to find another carrier that will, but my issue is with the producer/other insurance personnel, they don't believe it's necessary- which makes it hard to proceed with finding another.

For Property, if there's a triple net lease, then if that's sufficient, OK, but it still leaves us in the position of having to tell them to execute a triple net lease. I assume that the reason a triple net lease makes property ok is because it contractually creates an obligation to insure the building on the part of the business entity, thus creating insurable interest.

For Liability, there is a difference between providing additional insured and named insured status. I've not been able to find a specific case study of this exact situation, but this one comes close:

http://www.jeffcobrc.org/uploads/Busine ... _Howes.pdf

I guess the issue is that some agents believe that being the owner of your business entity means that you enjoy the full benefits of named insured status, even if your personal name is not listed, and further, that the gap can be closed with additional insured endorsements. I don't believe that's true, but without case studies of denied claims it's hard to support that position.

[js72]

I agree with rcrenter's comment that the Triple Net Lease creates the insurable interest on the part of the LLC, if there is one in place. However, I think this approach can still leave holes in the coverage for the individal member that they should be aware of. The AI status on the LLC's policy only provides vicarious liability for the member, there's no first party coverage absent a GL in the member's name personally or Named Insured status if they are combinable. The LLC & the individual would also be sharing the liability limits under both these scenarios, you may consider increasing the GL limits if that's an option or adding umbrella.

None of my carrier's will add an individual as NI on commercial auto unless it's a large account $250K premium & over, even then it's not an easy sell.