Thursday, July 22, 2010

Q. I own the commercial building that houses my HME store. How do I make sure they’re both insured properly?

A. When a new vehicle is purchased, the registered owner is the same as the named insured—they match. Should an accident occur, since the registered owner and the named insured are the same, coverage applies and the carrier will protect the named insured. It’s something that most people don’t even think about because it is so basic.

However, every year, we review hundreds of HME insurance policies where buildings are added to a policy that doesn’t name the individual or the LLC that owns the building. Since the building owners are not named on the policy, no coverage is provided even though the insured pays premiums for the coverage.

Confused? Let’s follow the analogy of the new vehicle purchase, above, and apply those same principals to building ownership. For a policy to adequately protect an insured building for property and liability coverage, the named insured on the policy must match the ownership title of the building.

For example, you can’t own a building in a personal name and have the building insured on an HME policy that has a different entity as the named insured—they don’t match. Therefore, all buildings owned by entities must be written on a separate and distinct policy. Remember, the named insured must match the ownership title of the building. If that is not the case, come claim time, no coverage will be afforded.

With minimal, if any, additional cost to insure the building correctly, you will save hundreds of thousands in claim payments should a loss occur. Is it worth investigating your current policy? When you are talking about this kind of money, yes, it is.

Weston Millward is the CEO of The Millward Agency. Reach him at 801-571-1100 or