What type of insurance for wholesaling?

Question

What would other wholesalers out there recommend for protection against liability? I currently operate as an LLC but been thinking about shopping for some type of liability insurance. Then again, not sure what for because I currently do not own any property and very little assets.

I just want to protect myself in case I hire some help for marketing and then they get hurt on the job. Or in case someone gets hurt at a property that I am buying or selling.

What type of protection should I be looking for in terms of wholesaling? Thanks in advance.

Will Barnard · Answer

As a wholesaler, you don't need insurance as you never own the property. However, if you fire an employee to do task for you (like marketing), then you need to pay workers comp insurance. That is expensive.

Going the route of hiring an "independent contractor" to do these tasks may also landf you in trouble. If you meet guidelines that say that "contractor" is actually an employee, you could get dinged!

Martin CS · Answer

Thanks Brian! Anyone else have more input?

Brian Levredge · Answer

That would depend on the type of wholesaling you are going to do.  If you are actually going to be owning the property for a period of time, you would want a property and casualty policy as well as  GL policy.   If you are going to be controlling the property (but technically not owning it) via contract and assigning that contract then there shouldn't be much of a need.

Worker's comp policies are what employers use to cover employees who are hurt on the job.  They are also fairly expensive.  If you have someone working for you, make sure to get an independent contractor agreement with them and also have them sign something to the affect that they will carry their own insurance or self insure.  You might want to look into an umbrella policy as well to cover you on the back end.