Commercial Liability Insurance- nobody will give me a policy
I have contacted three separate independent insurace agencies in town and all of them tell me that they can not give a GL policy to my business because I am an investor that buys and sell's houses. I'm planning to get my GC license by the end of the year and they're saying it doesn't matter, they no longer write GL policies for investors who buy and sell houses for their primary business.
Has anyone else had this issue? Where is everyone getting their commercial liability coverage from, or do you just not carry any?
Your input will be appreciated as I feel exposed at the moment.
I am a REI and do not even own my own home. I get all my properties covered through REI Guard - here you go: http://nreig.com/
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#1 Foreclosures Contributor
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Getting GL for the "business" would be tough....like getting GL as a "stock market" investor. What activities exactly are you looking to "cover"?
The actual individual property insurance is of course easy to get.
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@Christopher B., @Wayne Brooks is correct. Unless you are doing work for others, you do not need the GL coverage to cover a flip/remodel. The properties GL policy would pick up this exposure.
I have written GL policies for flippers in municipalities that require them to have a GL policy to pull permits or get a remodelers license. Im doing one right now for a flipper in NY.
@Barry H. I rep for Guard, so am very familiar with their product. The property policy does not extend GL coverage to your business entity, only provides premise GL. This is typical of a rental dwelling/landlord policy.
If you want to cover your business entity for operations off of your rental property locations, you need GL.
@Barry H. I use realprotect right now but hear good thinks about REIGuard
@Wayne Brooks I feel exposed as I'm operating a business entity with no liability coverage. If anyone sued my buy/sell entity, my buy/sell and rental entities are separated, I have no insurance coverage and would have to defend myself out of pocket. Maybe this is normal for buy/sell investors?
@Jason Bott I carry vacant/builders risk policies for each property that has $1m liability coverage. It sounds like nobody is carrying GL insurance for the buy/sell business. I guess my real question then is how are people protecting that business entity from liability? What are people doing is that entity gets sued, just paying out of pocket?
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@Christopher B. the question is what would the buy/sell entity be sued for that the property's GL policy would not pick up?
An example of where you would need a GL policy on the buy and hold entity;
Your taking garbage from the property to the dump and some of it falls out of your vehicle, causing an accident. This would be a GL claim, not an auto claim, that your property policy would not cover because you are more than 1000 feet from the property.
Originally posted by @Jason Bott:@Christopher B. the question is what would the buy/sell entity be sued for that the property's GL policy would not pick up?
An example of where you would need a GL policy on the buy and hold entity;
Your taking garbage from the property to the dump and some of it falls out of your vehicle, causing an accident. This would be a GL claim, not an auto claim, that your property policy would not cover because you are more than 1000 feet from the property.
What would happen on the buy/sell side in that same scenario? I imagine the builder risk/vacant policy wouldn't cover that.
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@Christopher B. correct. I was trying to give you an example of when you would need a GL policy for your buy and hold entity.
Question would seek to hinge upon "investors who buy and sell houses for their primary business". Clearly, if you have a W2 job, then flipping is not your primary business.
Originally posted by @Jeff B.:
Question would seek to hinge upon "investors who buy and sell houses for their primary business". Clearly, if you have a W2 job, then flipping is not your primary business.
I don't have a W2, real estate is my business and has been for a while. Doesn't matter if you're full-time, part-time, or even a licensed general contractor. They stated they no longer provide GL policies to investors that are buying/selling. I figured if I obtained my GC license, which I plan to do this year, the issue would be resolved but they came back again and stated that didn't matter either.