Umbrella Policy for Multifamily Properties

[Vasundhara Ranjani]

We now have several multifamily buildings - each with its own robust insurance policy. However, it was suggested by a friend that we should get an umbrella policy for each building.

I inquired with our agent and he advised that we do either of the following:

1.) Increase liability coverage per building

2.) Get an umbrella policy per LLC (apparently we can't get it per building?)

The latter is significantly more expensive, however, which option would you recommend given our situation?

Also, each of our buildings is in its own LLC and so what is the best organizational structure you would recommend that will protect us best?

Would having the buildings/LLCs in a trust or several trusts (anonymous?) help? If so, how?

Thanks in advance.

[Jason Bott]

Originally posted by @Brian Bault:

@Jason Bott I am still new to this.  Would the umbrella policy replace the homeowners for each property?  Also, can it reach across state lines?  I currently have a rental in WI and am looking to purchase one in Pennsylvania.  Thanks!

 Brian, the Umbrella is in addition to the underlying Rental Dwelling/Landlord policy.  The policy raises the General Liability limit from the underlying policy by $1M, $2M, etc.  It does not expand coverage (the types of claims) in any way.  

A Rental Dwelling policy will have a "Premises" liability policy.  This means the Liability on the policy only covers the parcel the rental property is on, and nothing further.  A Homeowners policy will give you "Personal Liability", and that will extend throughout the continental US.