Executors of Estates and Trust Fiduciaries responsible for real estate, valuable personality, art  collections, and other investments or property under their control and management should regularly review insurance policies to ensure that no gaps or lapses in insurance exist to avoid risk and exposure in the event of a loss or a claim by a third party.  Herold Law counsels clients in risk management and conducts asset portfolio reviews collaboratively with insurance brokers and asset managers to ensure that appropriate insurance is in place to hedge against unforeseen or predictable risks of exposure.  Frequent coverage disputes arise when the policy fails to identify the true owner of the property in circumstances where the original owner dies, an Executor has been named, or the ownership in the property has been transferred to a Trust or corporate vehicle such an LLC, and the insurance policy is not corrected to reflect the proper and actual insurable interest in the property.  Have appraisals of the Estate or Trust been updated so that they are adequately insured for their true value?  Has a claim to an insurance company or the broker been reported in a timely manner and in accordance with the terms and conditions of the policy?  Insurance companies often look for loopholes, misrepresentations, or omissions in insurance applications to void coverage in the event of a claim.  Is the Estate property vacant while it is listed for sale?  A vacancy policy is required to avoid forfeiture of coverage if a loss occurs and the vacancy is not brought to the attention of the insurance company.  

It is incumbent on fiduciaries to review their risk management oversight over portfolio assets to hedge against risks that could materially cause financial harm to the Estate or Trust.  Michael J. Faul, Jr., heads the Insurance Recovery and Risk Management Group at Herold Law, P.A., and he can be contacted at 908-647-1022, extension 122.

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