Policyholder

What it means

The policyholder is the one who concludes the insurance contract and pays for it. The rights over the policy are theirs: to amend it, to cancel it, to name the beneficiary. They need not be the one whose property or health is insured.

The insured carries the risk and the beneficiary receives the indemnity. In a company the policyholder is usually the s. r. o. and the insured a director or an employee; under a lease the lessee holds the policy and the payout is assigned to the lessor.

The policyholder also has to answer the insurer’s questions truthfully and fully when the contract is made; a false answer can later mean a reduced or refused payout. Taking out life insurance on someone else, such as a key employee, requires that person’s consent.

How it works in practice

Invoicing and the tax deduction follow the policyholder: the premium belongs in the costs of whoever the policy names, not of whoever sent the payment. Recharging between related companies has to be documented.

Changing the policyholder changes the contract and needs the insurer’s consent, typically on a car sale, a property transfer or a group reorganisation. After it, a claim is reported by the new policyholder and old contacts stop working.

When we take over an agenda we compare the policyholder on every policy with the Business Register entry. After a change of company name, registered office or a merger the insurer must get the new details, or invoices keep going to an entity that no longer exists and payments cannot be matched.

What to watch out for

The car stays insured in the name of a former director, who is both policyholder and beneficiary. After a crash the insurer pays him, not the company, and the company is left asking for its money from someone it parted with badly.

The owner insures assets in his own name as an individual although they belong to his s. r. o. The company then cannot claim the premium as a tax-deductible expense because it is not the policyholder, and after a loss there is a dispute over whom the payout belongs to and whether it reaches the company at all.