Lenders & Contracts · Insurance Term
Lender's Loss Payable Endorsement (LLPE)
Definition
A lender's loss payable endorsement is a property policy endorsement that names a lender and gives it strong rights to claim payments, often including the right to be paid even if the owner's own claim is denied. It is commonly added using the CP 12 18 Loss Payable Provisions endorsement.
In Plain English
The CP 12 18 endorsement offers a few options, including simple loss payable, lender's loss payable and contract of sale. A plain loss payee usually gets its name on the claim check but has no greater rights than the owner. The lender's loss payable option gives the lender protection much like a mortgagee clause.
Under the lender's loss payable option, the lender can typically still collect if the owner's claim is denied for something the owner did, such as a misstatement. The lender usually has duties too, such as paying premium if the owner does not and reporting changes in risk it knows about. It also commonly receives advance notice if the policy is canceled.
Lenders financing buildings usually prefer the mortgagee clause, while those financing equipment or personal property often use this endorsement. Your lender insurance requirements will say which one the lender wants.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical: a lender finances $500,000 of equipment for a hotel and requires lender's loss payable status. A fire destroys the equipment, but the owner's claim is denied over a misrepresentation in the application. Under the lender's loss payable option, the lender may still be paid up to its interest.
What to Watch For
- Check whether your lender wants loss payee, lender's loss payable or mortgagee status.
- Use the lender's exact legal name and address, and the correct property or equipment.
- Make sure the ACORD 28 or certificate matches what is actually on the policy.
- Remove lenders from the policy once their loans are paid off.
Last updated October 14, 2026 · Primesure editorial team · How We Write