LLC vs. Umbrella Policy in handling liability

2 Replies

I know that this has been asked here in the past but how do you handle liability issues of being sued? Do you put your properties iinto LLC? Do you have an umbrella policy for problems that may come up? Do you do both? Can you do both? Any help would be appreciated.

Luke

This is a great issue that I want to see how others answer also. We do not have our props in an LLC but we do have an umbrella insurance policy. I dont know what protection each provides against being sued, although I have heard that LLCs offer protection where being a sole proprietor does not; I don't know if the umbrella would give an S/P the same protection, so Im curious to see what the 'experts' here have to say.

@Luke F. and @Tim Sabo , there are many threads on this topic.  It's not an either/or question.  If the end game is to eliminate as much risk to your assets, then you do both.

The way I see it (I'm an insurance broker, not lawyer),

1) The LLC creates walls and silos between personal assets and business entities.

2)  The umbrella policy is the bucket of $ to pay claims out.  If you think you will need more $ to pay out on bigger claims, you buy higher limits of umbrella coverage, (additional buckets of $)

Hope that gives some perspective you can use in your situation.

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