Shop insurance beneficiary "transfer"
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  1. #1
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    Default Shop insurance beneficiary "transfer"

    I'm renting my shop space in a small industrial complex, it's 4 buildings each with several roll-up door style shop spaces. When I signed all the documents to move in last year, I was required to get a general liability insurance policy to cover the usual stuff (both the shop and the VMC). My rental is managed by a property management company, but owned by an individual. One of those situations where rich people just want to own stuff and have someone else do all the paperwork and maintenance.

    They accepted the insurance policy that has the building owner as the insurance beneficiary. However, in the last few weeks they have switched to some automated 3rd party system to keep track of which tenants have insurance since tenant turnover is so high. They are re-verifying insurance.

    They rejected my insurance policy this time and are requiring that they, the property management company, are the beneficiaries of the insurance policy. Note that my policy hasn't changed and it was accepted and approved by them before I was given the keys.

    So it seems they are trying to force everyone to list them as the beneficiaries and transfer that from the building/property owner who is currently the guy who would get paid if the place burned down or whatever.


    Is this whole thing legal? It's weird to me that they are requiring a major change to the insurance policy in the middle of the year-long contract. Would they have any right to evict me if I didn't change it considering I already signed the contract and was approved by them last year?

  2. #2
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    It’s called loss payee. It could change at any time for a number of reasons. It doesn’t change your insurance coverage.

    If the building was sold to a new owner the loss payee would change.
    It may be the building owner’s management company. It’s a cleaner way to handle rental property for tax purposes.

  3. #3
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    I'm not an insurance expert but most of my family works in insurance. Something is not quite right here, and I recommend the first thing you do is talk to your insurance agent and have them talk to your property manager after.

    First, I've never heard of listing the beneficiary of a general liability policy. Liability insurance covers a wide range of things, I suspect the most common being lawsuits due to injury, but other accidents as well. How is anyone to know who's getting injured or what accident will happen? Your landlord likely has a policy covering the building itself for property damage and also liability, but your general liability may also kick in in either case. I think it's more likely that the property management is looking to be named as an additional insured or similar, linking your liability insurance in the event of an accident.

    A loss payee is another possibility as mentioned above and is closer to a "beneficiary" but not typically linked with liability insurance. The landlord or management company would be a loss payee in the event you're required to insure their building.

    What Is a Loss Payee? When Should You (Or Shouldn’t You) Ask For It? - myCOI

  4. #4
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    Quote Originally Posted by JCByrd24 View Post
    ...First, I've never heard of listing the beneficiary of a general liability policy. Liability insurance covers a wide range of things, I suspect the most common being lawsuits due to injury. How are you to predict who's getting injured? Your landlord likely has a policy covering the building itself for property damage and also liability, but your general liability may also kick in in either case.

    I think it's more likely that the property management is looking to be named as an additional insured or similar. A loss payee is another possibility as mentioned above and is closer to a "beneficiary" but not typically linked with GL insurance. The landlord or management company would be a loss payee in the event you're insuring their building.
    ^^ This. The building owner carries his own insurance, but gets listed as an "additional insured" on the CGL policy. The CGL policy is for the business, not the landlord. If someone is injured on the property the CGL policy covers it, and the landlord is an "additional insured" in case they go after him too.

    The property management company should be a "certificate holder", which means they get proof of the policy every renewal, but they are not insured under it because they carry no risk. It's just to show that the tenant is insured.

    I lease my building, the owner and myself are the only people insured under the policy. I have customers that are certificate holders, because they require me to carry CGL insurance.

    There are no "beneficiaries" on a CGL policy because it has no cash value.

    OP should be able to get an accord cert for the property management co. with just a phone call to his agent, but I would not list them as an additional insured unless the owner requires it. There is additional cost associated with "additional insured", usually none for cert holders.

    What BD said is possible- the owner may also own the prop mgmt co., in which case maybe he would be removed as the additional insured and the prop mgmt co. would take his place.

  5. #5
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    Insurance that covers YOUR personal property not has you as beneficiary.

    Liability for property damage is property owner or their agent.

    Sounds like you need to redo your policy to cover your stuff and the building.

    Seek quotes from different providers as cost may be better but more providers means less chance of missing something.

    Sent from my SAMSUNG-SM-G930A using Tapatalk


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