Best Practices When Offering Property Ownership Guidance to Commercial Real Estate Clients

• September 1, 2026

Author: Ask an Expert

This month, our team of experts addresses a practical question: What are the best practices for naming the insured on a commercial property policy? Should an agent explain the insurance implications of various ownership structures and recommend how the named insured should be listed, or should the agent avoid making those recommendations and allow the client to decide? Let’s see what our experts said.  

Question 

I am looking for guidance from an E&O and agency best practices perspective rather than legal advice.  

I often insure rental properties where the ownership structure is not straightforward. For example, title may be in an LLC while the mortgage remains in an individual’s name. In many cases, the client does not have an attorney or CPA they can consult, or they are unsure how the ownership and insurance should be structured.  

From an E&O standpoint, how much guidance should an insurance agent provide in these situations? Is it appropriate for the agent to explain the insurance implications of different ownership structures and recommend how the named insureds should be listed, or should the agent avoid making those recommendations and instead require the client to decide who should be listed as the named insured(s) and any additional named insured(s)?  

If the client is uncertain and asks, “How should this policy be written?” what is considered the best practice for an agent to minimize E&O exposure while still fulfilling the agent’s professional responsibility? Where is the line between providing insurance guidance and venturing into legal or ownership advice? 

Responses 

You can answer insurance questions about who can be an insured. Be certain that the insurer confirms your advice. Defer any advice that is legal or accounting. If they do not have a lawyer or a CPA, recommend getting one. 

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Property policies insure interest. It is critical for all parties with an interest to be properly named.  

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Your job as an agent is to insure all the persons and entities with legal exposure. When you know there are multiple names on titles, mortgages, and even advertising (e.g., DBAs), name them all as named insureds on the relevant policies. Suggest the applicant confers with an attorney but resist the urge to give legal advice. 

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I am sure your E&O insurer will recommend that you not make recommendations concerning how property or business ownership should be structured. That’s lawyer work for the legal aspects and accountant work for the financial and tax aspects. An agent needs to gather information about ownership and structure and recommend insurance to cover the various interests. It’s your responsibility to know enough about businesses and policies to recommend the appropriate coverages. It’s the client’s responsibility to seek the advice of his attorney and accountant to set everything up correctly. Most importantly, the client is responsible for answering the agent’s questions (a process that should be carefully documented by the agent). 

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I believe an agent has the obligation to ask the client for the legal name of the titled property owner. If the client asks how the policy should be written, the answer is the same – the named insured should be the legal name of the property owner. If they don’t know or are unsure, it is best to tell them the policy cannot be written without that information. It is not your job to do this research or navigate the client through this process. It needs to come from the client. As a reminder, document, document, document.  

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Any client that does not have an attorney or CPA they can consult is in that position because they do not want to pay the proper professional for professional advice. Please do not let that become your E&O claim. It is never, in my opinion, appropriate for an insurance agent to give advice on how ownership should be structured. You can explain the insurance implications, but the client should make those decisions with an attorney and CPA. Once they’ve made those decisions, you can get to work on putting together an insurance program.  

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When a client asks, “How should this policy be written?”, an agent has two choices. If they want to operate as an order taker, the answer is “You tell me.”  If they want to operate as an insurance professional, the agent will discuss the options and the pros and cons of each with the client to help the client decide on how various people and entities should be covered. I don’t consider it reasonable to expect most insureds to understand how an insurance policy should be written. That is why they come to an insurance agent. Keep in mind, too, that the standard of care required of an agent is dependent, in part, on the state where the insured is located and how the agent presents itself. 

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Always recommend that your insured consult with their attorney, then document the fact that you made that recommendation. Meanwhile, yes, you should explain insurance implications of different ownership structures. But after educating your customer on the implications, they must decide. Often, unless they fix their inconsistencies with ownership/interest, there may not be a perfect solution. The question, “How should this policy be written?” should be answered by explaining the implications. If there is a clear answer in your mind, it is ok to say, “If I were in your position I would…, but it is clearly your decision.”   Document, document. Do not recommend solutions. 

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This is a common issue for many clients with large real estate portfolios. Some clients routinely have one or more entities for each property. Each piece of land, building, contents can be owned by different LLCs, and there may be separate holding companies, operating companies and management companies. For clients with 50 locations, I have had over 100 named insureds. It can be particularly confusing when a group of properties is managed as one group, but the ownership/investment tables can vary drastically between locations (relatives, trusts, etc.)  To avoid E&O and protect the client, here is what I recommend: 

Every year with your renewal, include the complete list of named insureds noting their full legal name, purpose/operations, the ownership of that entity, and the entities ownership interest in other entities or assets/operations. Spend some time reviewing this list in detail with the client, and have the client confirm that the list is complete.  

Review a matrix of all named insureds vs. policies in force. This is an excellent and visual way to review potential coverage gaps with a client. If any entity is not included on a specific policy, you are noting that in your proposal. For example, if a client says that an entity is dormant or otherwise has no employees and no direct labor, it might not be included in a worker’s comp policy.  

Explicitly schedule all named insureds. Do not rely exclusively on omnibus named-insured wording that automatically covers majority-owned subsidiaries. When you map out the ownership, real estate clients often do not fit into neat family trees with a single corporate parent that you can name as the parent company.  

Assume that every new location includes a new named insured and specifically request that detail.  

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My best advice to you is to advise them to establish relationships with an attorney and an accountant so that those professionals can structure the appropriate ownership arrangements. Only then can you determine the way in which insurance coverage should be designed.  

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Investment properties present special challenges. The more complicated the ownership and the larger the corporation, the more important it is that you understand the vagaries of legal ownership. If a customer grows beyond your knowledge, it may be best to consider a referral of the account to an agent with the real estate background who can properly handle the insured’s interests.  

I am looking for guidance from an E&O and agency best-practices perspective rather than legal advice.  
 
I frequently insure rental properties where the ownership structure is not straightforward. For example, title may be in an LLC while the mortgage remains in an individual’s name. In many cases, the client does not have an attorney or CPA they can consult, or they are unsure how the ownership and insurance should be structured.  
 
From an E&O standpoint, how much guidance should an insurance agent provide in these situations? Is it appropriate for the agent to explain the insurance implications of different ownership structures and recommend how the named insureds should be listed, or should the agent avoid making those recommendations and instead require the client to decide who should be listed as the named insured(s) and any additional named insured(s)?  
 
If the client is uncertain and asks, “How should this policy be written?” what is considered the best practice for an agent to minimize E&O exposure while still fulfilling the agent’s professional responsibility? Where is the line between providing insurance guidance and venturing into legal or ownership advice?  

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