We are in the process of getting insurance for our LLC (more specifically, insurance for our first home as an LLC). We are primarily going to be flipping homes…6-12 a year. Our insurance agent recommended getting a Builders Risk policy. It allows us to add and subtract properties monthly via a worksheet received in the mail. He mentioned getting General Liability as well. To be honest I’m just plain confused! He said he would make it easy for a layman to understand but failed miserably. Can some one shed some light on this? Draw a picture if you need to
Howdy Big River:
I will help a bit. A standard homeowners policy usually has fire, wind, hail etc in the policy the same as the policy you get for rental property. Most homeowners policies include general liability as well. If someone is at your home and falls down the stairs the policy will cover the accident with in the policy limits of course. Rental property does not include this extra insurance and all you can get is fire and extended coverage and perhaps a loss of rent rider and other extras. You can buy one policy of general liability to cover several properties and change as you need by adding and subtracting property as you buy and sell them. Hope is was simple enough and is some help too.
Yo, tedjr! Thanks for the reply. I guess my question is, do we need General Liability? We will be only flipping and not renting for the time being. If a contractor gets hurt on my property he should have insurance, I know that because he will need to show proof of insurance before he works for me. If the contractor decides to sue my LLC he can only get what assets the LLC has, right? If I play my cards right, I will have no assets So what good would General Liability do me?
Howdy Big River:
Yes you are right. If you are personally negligent you may be held personally liable or if you commingle funds between your company and your personal money.