Loss Payee

This term comes from InsuranceLand. A loss payee is a third party that is paid for a loss, rather than an individual person.

You own a building, where you host mass seances in order to speak to dead military leaders...Genghis Khan, Frederick the Great, Omar Bradley. However, you don't own the building outright. You have a mortgage.

One night, a seance goes terribly wrong. Napoleon gets into a fight with Black Jack Pershing over the best way to ferry forces across the Rhine. They tear up the place. You need to file an insurance claim.

However, instead of sending the money to you, your insurance policy has a loss payable clause. This provision states that the bank holding the mortgage gets the check, not you. The bank, in this case, is the loss payee.

See: Loss Payable Clause.