Residential or Commercial Insurance on Investment Properties Owned by LLC

[Randy Forcier]

I own a few properties in an LLC, up until now I've always had Residential Insurance Policies with the LLC named as an Insured along with myself. Recently an Insurance Agent friend of mine recommended that I get a Commercial Policy because he said I was still exposing myself to risk by even being named personally on the Residential Policy.

Based on the research I've done, I can't seem to be able to tell one way or another which way I should go.

Someone please bottomline me: Is it okay to keep my Investment Properties that are owned by an LLC insured with a Residential Policy with the LLC listed as an Insured or should I switch to a Commerical Policy?

I'm asking this out of pure protection concerns, cost is not an issue as I have found my friends Insurance Company is able to keep the commercial premiums the same as the residential policies. Besides the protection concerns I am a little concerned about the lender calling the loans on some of them once they take a look at the new insurance, but I have a hard time believing they would actually do that.

Any help would be apprecaited.

[Bill Gulley]

If cost is not an issue and the properties are titled in the name of the LLC, go commercial in the name of your LLC and take yourself off as an insured. Then get a personal liability umbrella policy that kicks in if the corporate veil is pierced in any suit. Don't tie your personal name with the LLCs interests in any manner except as to personal responsibility on loans to the LLC. :)