I would like to hear from any knowledgeable members who a solo 401K trust. My question is how did obtain liability insurance on rental properties that the trust owns? Also can the Trust be sued for issues that arise from renting?
Insurance can be titled in your name as trustee of the solo 401k plan (for example, if the plan name is Chargers Solo 401k trust, one way title can be taken is as follows: Allan Gibson, Trustee of Chargers Solo 401k Trust). The insurance proceeds are paid with solo 401k funds.
You need to obtain a commercial or trust policy. This should be a separate policy for the plan, not tacked onto your personal insurance. Not all insurers write such policies. There are some reputable providers who focus on real estate investor policies that participate here on BP.
As the property owner, the 401k trust is the insured entity, and could be sued just as any other property owner/landlord.
Allan, if you are buying a rental property in your Solo 401k - you should simply purchase a landlord policy, which comes with the liability insurance coverage. As Mark mentioned you, as the trustee, can obtain insurance in your name if the insurance company refuses to issue a policy using the name of the trust. I'll email you some additional info regarding this.
@Allan Gibson a commercial policy can be set up with the Trust as the "Named Insured". Also, most commercial policies will also defend the owner of any Named Insured. Meaning, if you are named personally in a suit in regards to that property, the policy will defend you if you are the owner of the Trust.
You can also add your personal name as a second Named Insured.
Lastely, if you put both the trust and you name on the policy, list the Trust first so it is the name that shows up on all invoices, certificates, etc.
Currently my State Farm agent could not get Citizens to write it in my name with the trust as others insured or vise versa. Can someone point me to a company that will write the policy in my name with trust as others insured?