Does a personal umbrella do anything for me if I have commercial properties under LLC name and I gave personal guarantee on the loan? Wondering if a personal umbrella helps me at all if the LLC gets sued?
Hi Ryan - we have the exact same set up as you do. We have a million dollar umbrella liability policy in case we get sued.
@Ryan Nelson Not an expert on the topic, but I would think no. You as an individual are the named insured on the personal umbrella. The LLC is not a named insured.
I don't think the personal loan guarantee has any bearing - that's a bank requirement.
Talk to an insurance broker/agent who specializes in commercial properties.
no legal advice.
Could you use an umbrella policy with a S-Corp instead of a LLC?
@Bill Womeldorf @Ryan Nelson Bill's post led me to think that my response may not have been clear. I was not saying that an umbrella/excess liability policy could not be obtained for your purposes (or for an s corp. Etc). I just dont think that your personal umbrella policy will do the trick. You can buy a commercial excess liability policy, but its different from your personal umbrella.
no legal advice.
@Ryan Nelson @Derek B. is correct in his explanation. A personal umbrella excludes business operations which is what makes it a "personal" umbrella. A commercial umbrella will cover the business and the owners of the business. So if the llc and you are both named in a lawsuit, the commercial umbrella defends both.
Both the personal and commercial umbrella give no support to the personal guarantee.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.