Liability protection for main company

3 Replies

I have my portfolio setup in a fairly complex, but prudent way. I have a main LLC, which is a c-Corp. It controls the financial reserves, expenses and payroll. Each property is in it's own LLC owned by the main LLC. Each LLC also have it's own property/liability insurance. The main doesn't have any insurance, however, I was thinking of adding a 4 million umbrella just in case. I just worry about claims or issues that can happen in the future its mold, structure issues, lead, etc. Properties are in NY, NJ and CT. Am I being a bit worrisome for no reason? I worry because my main company holds significant stocks and securities, as well as being the sole owner of all my other properties.

Having an LLC structure like this with wholly owned subsidiaries may come back to bite you *depending on the case law for the jurisdiction that applies in your businesses*. I'd bring your concerns to your attorney.

Calvin T. Lead, Mold and Structural issues can all be excluded on insurance policies depending on the claim scenario.  You may want to present your concerns with your broker.

If all of your properties have common ownership, (with you owning more than 51% of each property), you can have all llc's under 1 Umbrella policy.  This way you are not wasting premiums on several lower limit policies and can get 1 policy with a higher $5M or $10M limit.

Originally posted by @Jason Bott :

@Calvin Thomas Lead, Mold and Structural issues can all be excluded on insurance policies depending on the claim scenario.  You may want to present your concerns with your broker.

If all of your properties have common ownership, (with you owning more than 51% of each property), you can have all llc's under 1 Umbrella policy.  This way you are not wasting premiums on several lower limit policies and can get 1 policy with a higher $5M or $10M limit.

They aren't, and each property passed even though they are 50 + years old each.  The PM also give the disclosures and have them sign the waiver.  

Yep, that what I was thinking.  I am getting a bit of a push back as I have several properties.  However, I have an independent broker trying to obtain quotes for 5m for all properties.  If that fails, the backup plan would be to place a 2m rider umbrella on each policy per property.  Rather not do that later as it is going to be more expensive and a tedious task..