Is My Building Covered If I Bought It Personally?
It is quite common in the child care field for you to buy your building in your personal name. Often we make these decisions without giving the insurance implications a second thought. So the pertinent question is: can I insure the building on my school's policy? If so, will the insurance company pay my claims if I don't tell them I bought the building personally?
The answers are yes and maybe.
The important concept in a situation such as this is insurable interest. As the owner of both the school and the building, the school and you have an insurable interest in the building. You would loose financially if the building were to burn to the ground. A case of lack of insurable interest would be taking out an insurance policy on your neighbor's building. There is no insurable interest therefore you cannot collect insurance proceeds in the event of a fire.
So we cleared the first hurdle. The next hurdle is getting the insurance company to pay your claims. My answer above is that they may pay your claims if you don't tell them you purchased the building personally, but my question is why would you take that chance? They are not contractually obligated to pay the claim, merely to return your property insurance premium, if you didn't report ownership properly.
So, my suggestion is to always make sure of two things if you bought the building personally:
1. Execute a lease agreement between yourself and the school including verbiage making the school
responsible for insuring the building
2. Make sure your insurance agent has listed your personal name on the policy as the building owner
These two simple steps will save you heartache when a claim rolls around.