Trying to understand commercial insurance on multifamily
I'm under contract on a 12-unit multifamily building and looking at insurance options. One thing that isn't clear to me is what types of policies cover various situations. I think I understand the basics of personal home, auto, landlord, umbrella. But when I contacted the folks that sold me those policies they would not write a landlord or umbrella policy for anything more than six units.
So, I'm now talking to some insurance brokers and agents and I'm looking to BiggerPockets to help educate me on the options, learn the correct terms, and so I can make an intelligent decision. Here is my current understanding, please correct me if I'm wrong
- Commercial Landlord Insurance. I think of this as similar to a personal homeowners policy in that it covers the building(s) on this specific property as well as some liability for things related to the operation of the property, like someone suing for an incident on the property. From what I gather, I should be looking at all-risk, replacement cost, and business-interruption coverage. How is this different from Landlord insurance for 1-4 unit properties?
- Umbrella insurance. I've been told that my personal insurance carrier would not add this 12-unit to an personal umbrella insurance, so apparently I need to look at commercial umbrella insurance? Is this actually different than personal umbrella or is it just that some insurance companies choose not to write umbrella policies for folks with more than 6 units?
So, would someone explain how all these layers fit together? Let's say the 12-unit is held in an LLC and that there is commercial landlord insurance on the property, with $1M per-incident of liability coverage. Do I then add a commercial umbrella policy with the LLC named as the insured? Or do I that umbrella policy with my wife and I as the insured? Would that umbrella provide additional liability coverage for events related to the property as well as general liability not related to the property or LLC?