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Sole Proprietorship's & Residing Relatives

When the insured is a sole proprietorship, spouses and residing relatives are excluded without an endorsement.


The spouse of a sole proprietor will always be excluded, even if they do not reside with the sole proprietor. Any other relative can be excluded as long as they reside (live with) the sole proprietor. A relative who does not reside with the sole proprietor cannot be excluded. Spouses and residing relatives will usually not be listed on the exclusion endorsement; however, an exclusion endorsement is not required for them to be excluded.


When auditing a sole proprietorship, a note must always be included specifying whether or not there is a spouse or are any residing relatives on payroll. You always need to check. If there are any individuals on payroll with the same last name as the sole proprietor, you should also include an underwriter note specifying that, if these individuals are relatives, they do not reside and are not a spouse.


Remember, this only applies to sole proprietorship's. Spouses and residing relatives cannot be automatically excluded in corporations, limited liability companies, partnerships, etc.

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