It’s of essential importance that the named insured is properly listed on your General Liability policy. If a mistake is made here, your insurance carrier has the legal right to deny a claim.
Your policy should list the names of the current legal entities that you are operating under. Most underwriters will allow you to cover multiple entities under one policy if a single owner or group of owners have voting control over all entities that are listed.
A legal entity can be a sole proprietorship, partnership, corporation, or LLC. Not only is the entity covered but coverage is automatically provided for the respective directors, officers, shareholders, proprietor, partners, or employees while operating within the scope of their official duties. This is important, because these individuals will normally be shot gunned into all lawsuits.
The policy should also list past legal entities that you operated under that are still in existence even if they are dormant. The reason is that such an entity can be sued in the future as a result of a product or construction job that was sold or completed years in the past. This is confusing to a lot of builders until they understand that the General Liability policy only covers bodily injury or property damage that occurs within the policy term. As a result, a policy that was carried in the past won’t cover damages that arise after the policy is no longer in force.
Lets take an example. Suppose that John Smith started out as a sole proprietor in 2004 under the name of John Smith Builders and converted to John Smith Builders, Inc. in 2006. In such a case, the named insured under the policy should read: John Smith dba John Smith Builders and John Smith Builders, Inc.