STG Partnership Endorsement Guideline 2

Explanation:

If the insurer is asked to issue a Policy to a partner of a partnership, showing the insured as a partner and the owner as the partnership, then the Policy will typically be issued for a portion of the value of the land equal to the portion of the partner's interest in the land. Sometimes partner's equity in the partnership is the amount of the Policy. Where such Policy is issued for an amount less than the amount of the land, then we must issue an endorsement to reduce our liability in the event of a loss other than total loss. Sometimes, the insurer is also asked to issue an endorsement showing a lender which has received a security interest in a partner's interest in the partnership and stating that the lender will be an insured should it acquire ownership of that partnership interest. This endorsement could be issued in connection with a Policy issued to the partner.

Underwriting Requirements:

(1) Issue the Policy for the percentage of fair market value of the land equal to the partner's interest in the partnership.
(2) An Underwriter must approve the endorsement to be issued.