• Loss Payee Versus Lender’s Loss Payee: One Word Can Make All The Difference
  • July 26, 2016 | Author: Niel Alden
  • Law Firm: Burr & Forman LLP - Nashville Office
  • When a lender makes a loan secured by personal property, it will perfect its interest in the collateral under applicable law. To further protect the value of the collateral supporting its loan, the lender will also require proof of insurance and obtain an endorsement on the borrower’s insurance policy. Whether the lender obtains an endorsement as a “loss payee” as compared to a “lender’s loss payee” can make all the difference if the insured borrower’s policy is for some reason deemed to be invalid or voided. Because the borrower purchases the insurance and becomes the named insured, secured lenders and lenders’ counsel should ensure the lender is adequately covered under the policy.