Which LLC insurances do you use?

Question

When purchasing a multifamily with an LLC, which insurance policies are recommended?

Would general liability, commercial property, and an umbrella policy suffice?

We are hiring a local property management company, does that affect the policies needed? Like perhaps remove our liability exposure?

Thanks! Stay classy BP

John Mocker · Answer

Nick

The recommended Policies do not differ if the ownership is an LLC or individual.  Assuming that the multi-family is 4 units or less:

1. Property & Liability:  Owner occupied:         Homeowners policy

Not Owner occupied:  Dwelling Fire Policy (aka Landord Policy)  or a Commercial Package or                                                                          Business Owners policy

2. Additional Liability:  Umbrella Policy

If the building is 5 or more units then  answer 1. is just Commercial Package or                                                                          Business Owners policy

Hiring a Property Manager does not alter the policies you would get.  The Property manager may ask you to name them on your policy.  If you do so, you are splitting your coverage and potentially lessening the limits.  If there is a claim and they are partially liable and you name them as an additonal insured, your poicy will pay both portions of the loss not just yours.  If you do name them, consider increasing your Umbrella limit as a way to offset the splitiing of the limits.

If you want to discuss coverage recommended for the Homeowners/Dwelling Fire/Businessowner... PM Me.

Nick Schiltz · Answer

@John Mocker thank you John, this was helpful and I was able to find an agent that will be able to provide what you have recommended.