landlord or commercial policy?

Question

I am considering transferring 2 duplexes and a home into an LLC. My insurance agent said we would add the LLC to the existing landlord policies. I had another agent say that I will not want my name on the policy and he would put the property/LLC in a commercial policy. A commercial policy sounds more logical in preserving the corporate veil. What is best practice? Thanks in advance for the help. I have a 25 unit apartment complex in a separate LLC with a commercial policy, if that matters.

Mike Dymski · Answer

Hey Jason, I am learning that I can have the LLC listed as the primary insured on a "landlord" type personal policy to be able to keep my name off it. I believe that is what you are saying as well. That makes me more comfortable from a corporate veil standpoint than having me as the primary insured or both me and the LLC listed. I also understand that a commercial umbrella can cover a landlord (i.e. not commercial) policy as long as the landlord policy is in an LLC name. Anyone, feel free to shoot holes in my conclusions here...learning the ropes.

Mike Dymski · Answer

Thanks. The intent of getting a commercial policy would be to remove my personal name to improve the protection of my personal assets that are not in the LLC. That's the advice I am getting from a new potential agent. The less stuff (bank accounts, loan, insurance policy, management, etc.) that is in your name, the better your personal assets are protected.

Jason Bott · Answer

@Mike Dymski Both ways work and do not create any issues.

Most commercial insurance policies have language in them stating that the owners of the LLC listed on the policy have protection on that policy.  In this case, you do not need to list your personal name to get protection from the policy.

I have other policies that are in the name of the owner, but then lists multiple llc's as Named Insured's.