When you buy insurance for your business, there’s one detail you don’t want to overlook: making sure that the name on the policy – the “Insured” name – exactly matches your business’s full legal name. This might sound like a simple thing, but many businesses don’t realise how important it is.

Ensuring these names match is the single most important part of an insurance policy. If the Insured name isn’t correct, or the name entered as the Insured isn’t a legal entity, then the insurance contract becomes invalid and could result in a claim being denied.

What Is a Legal Entity Name?

A legal entity name is the official name of your business as it appears in government records. It’s what you use on legal documents – like contracts, tax filings, and insurance policies – and it can be different to a business name.
Depending on your structure, this name could look different:

1. Sole Traders: Your own name or a registered trading name.

2. Companies: Typically ends in something like "Pty Ltd" in Australia.

3. Trusts and Partnerships: Could include the trustee's name or partnership name.

Below are a few examples for different business types and structures:

Example (Registered Company):

An interior fitout business trades as "Perfect Spaces Fitouts," but the registered legal entity name is "Perfect Spaces Interiors Pty Ltd." If the policy only lists "Perfect Spaces Fitouts," a claim could be scrutinised by the insurer on the grounds that the name insured doesn’t legally exist.

 Example (Sole Trader):

A sole trader named Tom Brewer runs a microbrewery business called "Tom’s Craft Ales." The name "Tom’s Craft Ales" is registered as a trading name, but the legal entity is still Tom Brewer as an individual. Since Tom is operating as a sole trader, the policy must list his personal name and the trading name to ensure the business and its operations are covered.

Example (Trust):

Jane Doe runs a landscape design business trading as "Design Excellence Landscapes" but the business is operated under a family trust, with Jane as the trustee. The correct insured name should be "Jane Doe as trustee for The Doe Family Trust, trading as Design Excellence Landscapes." If the policy lists just "Design Excellence Landscapes," the claim may encounter issues during assessment.

Tips For Getting It Right

To avoid the common pitfalls, here are some simple steps to follow:

1. Use the Full Registered Name: Always use the full legal name, including abbreviations like “Pty Ltd” or “LLC.” Avoid using nicknames or shorter versions.

2. Double-Check for Renewals: Even if you had the name correct initially, review it each time to renew your policy. Business names and structures can change, and it's important that your insurance reflects that.

3. Include All Entities If Needed: If you operate through multiple entities, consult with an insurance broker about which names should be included. Missing even one entity could mean part of your business isn’t covered.

4. Get Help From a Broker: Insurance brokers are experienced in these details. They can help ensure the name on your policy is accurate and that your business has the protection it needs.

Confirming Your Legal Entity Name

If you’re unsure of your legal entity name, check your official documents, like your business registration or licensing paperwork. For companies, refer to the name listed on your tax filings, or a quick search on the ASIC website will show your registered name. Trusts will have their name in the trust deed.

The Takeaway

Regardless of your business structure or branding, the name on your insurance policy must align precisely with your legal registration. Including the correct legal entity ensures there’s no ambiguity when it comes to claims, lawsuits, or verifying your coverage. It’s key to making sure your insurance covers you fully when you need it. Always double-check this with your broker to avoid costly mistakes.

If you have any questions about your legal entity name on your insurance documents, reach out to us at Midland. Our brokers are always happy to help.