A commercial insured is contesting its named insured schedule. The agent listed one part of the insured's name as a “doing business as" (DBA) because it is not a legal entity. The insured says it's not a DBA, but rather a division of the primary named insured corporation.

Q: How should the division be shown on the named insured schedule, knowing that it is not a filed legal entity and the insured wants it listed on certificates of insurance?

Response 1: That corporate division is using an alias as a trade name for branding for its front-facing name that customers and others might recognize. It is an unfiled DBA. 

One of my clients was doing that with several division names. I suggested to the corporate lawyer that they file a DBA with the four counties where they conducted business—which the lawyer did right away, and then told me it was a "good catch" as that was required in their states and counties.

Another client used a trade name for only certain hours several days a week at a restaurant to sound cool to the after-bar crowd seeking a fancy breakfast. We asked the underwriter to add the trade name to the policy and it was endorsed without any problem. We listed the named insureds as both “Ritzy Restaurant Corporation" and “DBA: Fancy Breakfast Nook."

Did you ask the underwriter to add the trade name to the list of named insureds? If not, do it. If the underwriter refused, ask your client for a letter from the corporate lawyer about the name's use and why it is not filed as a DBA. Then you can submit that letter to the underwriter and again request it to be added as a named insured. Or alternatively, maybe the lawyer will file the DBA.

Response 2: I wouldn't take it upon myself to call the “division" a DBA, unless the first named insured has registered the fictitious name with the state. I also might not want to insert the fictitious name as an additional named insured unless the business has complied with the statutes and rules for using fictitious names in the state. This is something to ask the state about or consult with an attorney who has experience in corporations and business names in the state.

Response 3: Unless the trade name is on the policy, either as a separate name or as a DBA of the legal entity name, you cannot put it on the certificate. The insurer is unlikely to agree to add the name unless it is filed with the state. The insured should contact the Secretary of State for additional information. 

Response 4: A DBA is not a legal entity, so whether the operation is a “division of" or “operating as" or “DBA," the first named insured's limits will be impacted by any loss. Talk to the underwriter to determine if the COI can show a DBA since, coverage wise, it doesn't make any difference. 

Response 5: In Nebraska at least, the DBA filing fee is $100 for the first 10-year registration. If it doesn't change the tax status, then what is the big deal to pay $100 every 10 years? Is it because someone else already filed that name and thus your client cannot register it? If so, then your client might be infringing on the trade name of another—which might be illegal.

Response 6: A corporate division, also known as a business division, is a discrete part of a company that may operate under the same name and legal responsibility or as a separate corporate and legal entity under another business name. So, it has either been established as a separate legal entity or it has not. If it is operating under an assumed name that is not a separate legal entity, then it is just that: an assumed name.

You were not specific, but I assume you are writing the legal corporation under the policy as the first named insured. In that instance, you will include the assumed name as the second named insured. That way you can show the DBA on certificates. If they don't like that, then they need to incorporate that DBA.

And just a parting note: In various jurisdictions, there are requirements for registering a DBA.

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

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