Posted: Thu Feb 14, 2008 11:52 pm Post subject: When a company change business entities
Does an insurance agent is required to notify the policy writer when his client has change the business entity?
Some Background, a person I know has been classify as a sole propieator for 6 years, even though, he's been incorporated all that time. I dont know if this type of classification has somehow affect his premiun or if it matters.
Any info wll be greatly appreciated
PS. The Agent has know all that time about the change
Welcome to the forum...I'm sure that you will get many responses to this questions. Speaking of questions, I have one for you that may help us give you some good information!
All that we can glean from your post is that a business is involved, and that business is incorporated. I am assuming that this business told the insurance company (and agent) that he is a sole proprietor.
In order to give you the best info, please tell us what kind of policy and coverage you are referring to. Normally, changing the legal entity is not cause for concern, except for certain types of business and commercial policies. On the other hand, if the insured lied about his entity formation on the application for insurance, we could be looking at a different matter.
Posted: Fri Feb 15, 2008 5:05 am Post subject: agreed
Hi InsTeacher,
I'd agree to all that you've said over here.
Quote:
On the other hand, if the insured lied about his entity formation on the application for insurance, we could be looking at a different matter.
Exactly!!
If thats the scenario we are looking at then we ought to be careful of the policy clauses, may be the policy requires any such misrepresentation of data to nullify the entire policy for the business owner. This is solely because for a promise to cover a certain nature of benefits, the insurer must be sure of the operations of that particular business, lest it ends up covering acts that are against social interests.
Regards,
Fatman
True, also changing the identity of business may not affect the insurances like- home, auto or life, as it is only altering the information related to the business. _________________ Register Now to have your Insurance queries solved.
