INSURANCE I.Q

What is a “Named Insured?” Every policy defines this term and controls how claims are adjusted. One of the first things defined in any insurance contract is who the Named Insured is. Understanding this is the basis of the following issues.

All too often when business owners get quotes from other agents, the simplest things are easily overlooked. Everyone seeks the lowest bid on insurance without paying attention to details. We occasionally run into auto(s) being insured under a commercial policy for a corporate entity and the titled owner of the vehicles doesn’t match the entity. This could create a huge problem if that vehicle is involved in a serious accident.

Sometimes business owners give little thought as to how a newly acquired auto is titled and we see it with some regularity. Owning a car in your personal name and using it as a shop loaner car, for example, can be readily resolved, short of having the title amended. A lease agreement between the titled owner and the garage entity can solve the problem by transferring the “insurable interest” to the business.

Another less frequent issue that we run into is policies with a named insured that doesn’t 100 percent match the actual name filed with the Secretary of State’s office. It’s related to the previous issue and can affect a much broader range of gaps in coverage.

The remedy is to perform a self-audit, with or without your insurance agent’s involvement. Doing this yourself will give you a glimpse of how good your agent is.

Step 1. Go to the Secretary of State website and find your filed entity in the Business Name Search function: mblsportal.sos.state.mn.us.

Step 2. Find ALL your current policies and automobile titles for all your vehicles.

Make sure all the names match 100 percent. If there are any discrepancies, take steps to get your ducks in a row. We would be happy to assist you with the process, making sure you are properly protected.

For assistance, contact Brad Schmid at (763) 5492247 or bschmid@cbiz.com.