Business insurance?

Question

here's a dumb question I feel like I should already know the answer to but do I need to purchase Business Insurance if I am going to rehab properties or just insurance for the actual rehab-builders risk, vacant dwelling?

What if a buyer decides for whatever reason that they want to sue me 2 years later?

Timothy W. · Answer

"do I need to purchase Business Insurance if I am going to rehab properties or just insurance for the actual rehab-builders risk, vacant dwelling?"
                                    
                                    I've adjusted a lot of liability claims on the individual property policy on the property - which is what you need.  You can get riders on the policy for vacancy and construction.  I've had the most luck with Foremost on getting policies with those riders.  As far as liability - since you are in Texas, there are 3 standard policies that have varying coverages.  They automatically have liability insurance in the policy.  I'd have to check my notes to see if Texas has standard figures/percentages on that.   Your contractors should carry their own general liability AND vehicle insurance.
                                    
                                    "Bonding insurance" doesn't exist though insurers will typically also issue bonds.  Bonding is a seperate financial instrument where another company basically takes on the financial responsibility of you fulfilling the law or a contract.  Think Dog the Bounty Hunter here - bailbonds man.  There are several different types of bonds and you can get them from your agent as well once a project is underway.  When the project ends, and the contract is fulfilled, you typically won't need the bond anymore unless there's some ordnance requiring it.  Many contractors will need bonding with a local municipality so they don't damage the village trees or crap like that.  Doubt you'll need that but maybe.  The village will be certain to let you know.
                                    
                                    "What if a buyer decides for whatever reason that they want to sue me 2 years later?"
                                    
                                    Are you providing 2 year home warranties?  Aside from the uphill battle they would have, I use an umbrella policy for concerns like this.
                                    
                                    Tim

Dick Green · Answer

I've always felt that a good attorney on retainer works better than great insurance.  Remember the old A.L. Williams saying in reference to life insurance? "Buy Term and Invest the difference".
              
            For me, what works is simple errors and ommisions along with a mean pit bull attorney.  That may not apply to your peticuliar endeavor.  But, I would still find the cheapest coverage available.

Reminds me of  a close attorney friend of mine, that helped me get started years ago.  He had suffered a stroke and mumbled when he spoke.  No one could under stand him.  I barely understood him except for the fact that I spoke to him quite often.  He would get people to agree to the most outlandish stuff just because they couldn't understand him.  Anyway, he used to say, "We'll invite everyone to the law suit party and find out who's got the money".
            
            Sometimes great insurance is counter productive and can be seen as a "come sue me and get paid", sticker if you get invited to one of those law suit parties.

Account Closed · Answer

Well are you doing this full time? If so, what type of insurance do you have for yourself, such as Health? Dental? etc?

The dwelling itself can have hazard insurance during the rehab. You can put into contract some CYA's, but you should have some bonding insurnace as well.

Most people forget this. Call your local rep. they can help put you in touch with the right people.