I was wondering if someone could explain the difference to me with regard to being named as the Loss Payee and/or Additional Insured. What does each do, and how are they different. I'm specifically asking in terms of being the lender on a property purchase/flip. TIA
@Lisa Eckman as it pertains to your situation,
*Loss Payee will put you in a position to receive the Property Damage claim payout if your client decides to not repair a building and walk away.
Example: The property you hold the note on has a massive fire and your client decides not to repair the damage, but walk away. Before your client gets the $, your position as Loss Payee needs to be fulfilled. Your client would get the balance of the claim pay out.
*Additional Insured allows you to be added to your clients General Liability policy.
Example: If there is a lawsuit against the property and you are named, your clients policy would defend you in court as an "Additional Insured of the policy".
Hope that helps.
@Jason Bott Thank you SO MUCH! That’s very helpful. I appreciate the examples.