You have some real estate. It’s mortgaged. The mortgage company requires you to carry insurance. So the insurance company should pay directly to your mortgage company, and not to you, if the property burns to the ground and there is no longer any collateral for the bank to foreclose on, right?
Your insurance policy is a contract between you and the insurance company. The bank has nothing to do with that contract. Yes, the bank can require you to carry insurance, and if you don’t carry insurance they can go buy a policy on your behalf and then charge you for the cost of that policy, but even then it’s still your policy.
What is the take away to guide your small business? Don’t count on your vendor for turning over their insurance proceeds to you if something bad happens. If something bad happens, your company and a whole host of other companies will be standing in line hoping to collect your pennies on the dollars. Mitigate your risk with that flammable vendor based upon knowledge and not hopes.