Investor · Bangor, ME · Member since 2015 · 8 posts · 2 votes
As the subject says I was curious what insurance products flippers are carrying for there LLC? My insurance agent recently seemed appalled that we are not carrying a business liability policy. Generally with our flip properties we are insuring them with additional coverage that has a one million liability policy for injuries uninsured contractors etc etc. Do you find this to be enough or are you carrying additional insurance to protect yourself?
Insurance Agent · Maitland, FL · Member since 2015 · 397 posts · 244 votes
9y
I'm going to guess he's appalled because that additional policy probably does not cover what you think it does. Usually a $1,000,000 liability add-on excludes worker injury (which would be uninsured contractors).
Insurance Agent · Maitland, FL · Member since 2015 · 397 posts · 244 votes
9y
I'm going to guess he's appalled because that additional policy probably does not cover what you think it does. Usually a $1,000,000 liability add-on excludes worker injury (which would be uninsured contractors).
Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
9y
@Account Closed Eludes to, if you are buying GL/property coverage for your rental/flip, that policy does not cover you for several risks.
The liability coverage part of the flip/rental will cover an individuals injury claims if you have not engaged them to work on your property. If they are a contractor, handyman, sub contractor, friend, volenteer, etc., they most likely have the right to file a work comp against your entity unless the individual who is filing the claim has another work comp policy that supersedes yours.
Work comp and Liability incurred off the premises of the rental/flip are just 2 of these other coverages a flipper is exposed to that they are not fully aware of.
Investor · Bangor, ME · Member since 2015 · 8 posts · 2 votes
9y
@Derek Lacy@Jason Bott, Thanks guys for getting back to me. I will say insurance is one of my biggest frustrations in the logistics of house flipping. I still can't believe there isn't a carrier willing to write a comprehensive policy for this side of real estate. In regards to the Business Liability policy what other things do these policy's usually cover?
Insurance Agent · Maitland, FL · Member since 2015 · 397 posts · 244 votes
9y
Matthew Logan
There are certainly owner controlled insurance policies (OCIP). That can pick up all risks for a project. But unless it's a large project, don't bother your priced out of that market.
A house flipper needs general liability, work com, and auto liability (if no owned autos then hired and non-owned) on an annual basis. Possible pollution liability.
Then on a project basis you need builders risk.
Feel free to contact Me directly for specific questions. I'm absolutely positive Jason would feel the same way, so feel free to contact him as well.
Investor · Bangor, ME · Member since 2015 · 8 posts · 2 votes
9y
@Derek Lacy Thanks! I have found just a policy with foremost Insurance alone to be expensive. How expensive are these other policies? I thought an LLC was supposed to protect me not make me insurance poor!
Insurance Agent · Maitland, FL · Member since 2015 · 397 posts · 244 votes
9y
@Account Closed
Whoever advised you that about an LLC did not do a good job advising you. What an LLC does well is protect you from catastrophic claims (think $10,000,000 claim). Only have $1,000,000 in liability, well you have your insurance pay $1,000,000 and you bankrupt the LLC to pay the rest of the claim, but of course that means you lose everything inside the LLC. But one quick way for a lawyer to pierce that LLC veil is to state you did not operate your business in a proper manner, and going around work comp law would be pretty good proof that you did not operate your business legally.
Yes, foremost is a specialty (think high risk) insurer, they are expensive, I would suggest many other options before foremost. Even in Maine.
While paying insurance might make you feel insurance poor, do remember losing all/most of your assets due to a worker injury or liability suit will really make you feel poor. Need proof it happens? It's on biggerpockets.
Good news is you are in Maine, so the homestead exemption if you are sued is that the courts can only take everything except the portion of your home that is mortgages plus $47,500. That's much better than Indiana's $6,200.
Portland, ME · Member since 2012 · 616 posts · 550 votes
9y
I haven't been able to find any vacant/under remodel home policies in Maine other than Foremost. Are there other companies my insurance agent isn't telling me about? I've tried several agents over the years.
Also, I only hire independent contractors. They are not required to have workers comp for themselves or relatives who work with them, but claim to have it for their employees, or that the guys that help them are also independent contractors. It's the wild west out there.
Investor · Bangor, ME · Member since 2015 · 8 posts · 2 votes
9y
@Amy A. I completely agree with the wild west part. I often times feel like insurance agents in Maine are just not familiar enough for what I do to write me the correct policies I need. The same with us as we only hire outside independent contractors and then they will tell me that there guys are all independent contractors.