Commercial General Liability Insurance for Buy & Holds

[Matt Swope]

Hi all!

When I purchased my 4th Buy & Hold property with my LLC my insurance broker suggested I consider getting a Commercial General Liability Insurance policy to further protect the properties and LLC. In total my properties are valued at around $1M and I am curious what sort of coverages everyone out there is getting for General Liability Insurance. Here is a rough breakdown of my quote of coverages:

General Aggregate
(Other than Products-Completed Operations): $4,000,000
Products-Completed Operations Aggregate: $4,000,000
Each Occurrence: $2,000,000
Personal and Advertising Injury: $2,000,000
Damage to Premises Rented to You: $300,000 Any One Premises
Medical Payments: $10,000 Any One Person
Hired Auto and Non-Owned Auto: $2,000,000 Each Occurrence

I am not concerned about the annual premium (under $350) I am just wondering what other investors out there are getting as far as coverage. 

Thank you BP community!

[Jason Bott]

@Matt Swope $1M per occurrence/ $2M aggregate is the limit most commonly used for investors of your size.  If they want higher limits, they will then add an Umbrella policy for another $1M.  You are lucky in that your insurance carrier has the ability to increase the GL policy to $2M/$4M.

A few additional comments to give you a more complete picture of how the GL policy works;

1) Occurrence is the max amount the policy will pay out for any 1 claim.  Aggregate is the max the policy will pay out in total before their obligation to you is fulfilled.  

2) Chances are you have the $2M/$4M limit extended to EACH location.  Double check but this is how most landlord policies read.  You wouldn't have to worry that you only have $500k/$1M per each location.

3) The value of your properties does not have a direct correlation with how much GL exposure you have.  A duplex worth $50k may actually have much more Liability exposure than a $1M Airbnb.

4) GL coverage on your 4 properties provides coverage against claims that occur on those 4 parcels.  If you are doing business for others outside of those parcels, then you may have other exposures that a commercial GL policy can pick up.  A commercial GL policy covers you throughout the continental US. 

5)  GL policies cover you for Property Damage and Bodily injury.  If you want coverage for any of the following; Fair Housing, Wrongful eviction, Discrimination, Injured workers, Rented vehicles, etc., you would need to purchase additional policies