Titles, Ownership and Named Insured – An Insurance Perspective

Real Estate Investments:
In the instance whereby there is a transfer of property from personal name to Limited Liability Corporation, or a grant deed recorded, for example a land trust, the insurance company should be notified and an endorsement should be issued on the policy specifying the name of the LLC or entity. It may be a requirement that the policy be rewritten.

Property Owned in a Commercial Name:
For property owned in a corporation or partnership, general liability coverage under a commercial policy may be required depending on use and purpose of property. Attention should be placed on leasebacks between entities even if there is common ownership, and their lease agreements which dictate which entity is required to insure the property and liability and any required risk transfer wording such as Additional Insured, Primary and Non-Contributory and Waiver of Subrogation. For example: a family owns a building through LLC. The family recently sold majority ownership of their business, the occupant of the building, to a third party. The lease between the entities dictates that the occupying business be insured for premises liability. The LLC that owns the building would be insured through a separate Lessor’s Risk policy, and the occupying entity would have a businessowners policy, or similar, which would insure for liability and name the landlord as Additional Insured. Attention must be paid to other risk transfer language included in the lease and other insurance coverages that may be required by the lease.

Owning Property in a Personal Name:
Insuring a property owned personally but used for or by a business, whether first party majority-owned or third party-owned, requires attention. A scenario and possible coverage option: two separate businessowners policies, one covering the personally owned property and the other covering the business entity.   An alternative is to obtain one businessowners policy covering the personally owned property and the business entity. Underwriters require evidence of common majority ownership between the building owners and business. Loss of Rent coverage to the building owner should be considered in the event the occupying business can no longer occupy the building due to a covered cause of loss. A drawback of the alternative option is shared liability limits for the building owners and occupants.


This information is provided from the point of view of insurance general concepts information, and does not constitute legal, tax or investment advice.  General insurance concepts are not applicable universally.

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