RI Risk Management Services (RI-RMS) works with lenders to customize loan insurance requirements for each commercial borrower. Every borrower has its own unique business operation and potential exposure to loss.
Does the policy have endorsements providing Loss Payee vs. Loss Lender Payee and Ordinance or Law coverage and limits? Should it? Is flood coverage ALWAYS required? If not, why not? And when is it?
Protect Your Loan Exposure – Ensure Borrower Insurance Coverage is Sufficient
Lending institutions each day approve loans to businesses following exhaustive review of applicant credit-worthiness and ability to repay the loans yet continually make one fatal flaw.
They rely on a Certificate of Insurance to satisfy their requirements that borrowers secure and maintain sufficient insurance.
A Certificate of Insurance will never reveal all the exclusions, limitations and endorsements that might leave a borrower without coverage and the means to remain a going concern following an incident, accident or disaster…
…and which can leave a lender exposed.
The Bon Jour Bakery, established in 1975, seeks a loan to expand to serve breakfast and lunch and to add state-of-the-art equipment. Finding an excellent credit history and Certificate of Insurance, First National extends the loan.
Six months later a fire severely damages the 60-year-old building housing the bakery. Updated town codes require demolition and new construction, costs excluded under the bakery’s property and casualty insurance policy – an exclusion not listed on the business’ Certificate of Insurance.
Bon Jour Bakery declares bankruptcy and defaults on its loan.
Rivers Insurance Group will provide lending institutions with the expertise to ensure they are not exposed to the unlisted exclusions, limitations and endorsements that are hiding in every insurance policy. We will review a borrower’s insurance contract, including the schedule of coverage (exclusions, limitations and endorsements) to minimize your exposure. We also will review and ensure that policy wording provides you with maximum protection.
Call us today to learn more.