Umbrella and General Liability Insurance

[John Boudreau]

I am new to bigger pockets but have been investing in single family and small multi family for the past 15 years and have grown to approximately 40 doors in Nebraska, Iowa and Missouri. The more I am reading and listening, the more concerned I get about liability protections. Currently, all of our properties are owned in an LLC but I am concerned that the legal protections of the LLC are not as solid as they once were. I also have general liability insurance, a personal umbrella (which I don't think will cover me as I may need a commercial umbrella). How have others structured their insurance and property ownership to maximize liability protection. I'd be interested in talking to any insurance professionals with thoughts. Thanks in advance.

[Ty Coutts]

Welcome to BiggerPockets! It sounds like you've built an impressive portfolio over the past 15 years. Your concerns about liability protection are valid, especially as your portfolio grows and the legal landscape evolves. While owning properties in an LLC is a solid foundation for liability protection, it's wise to continually reassess and enhance your strategy. Many seasoned investors bolster their liability protection by using a layered approach. First, ensuring that each property or group of properties is held in a separate LLC can limit exposure, confining potential liability to the specific entity involved. Additionally, augmenting your general liability insurance with a commercial umbrella policy can offer a higher level of protection, potentially covering gaps that a personal umbrella policy might not. Consulting with a knowledgeable insurance professional can help tailor a policy that addresses your specific needs and risks. Furthermore, maintaining rigorous property management practices, keeping thorough records, and implementing robust tenant screening procedures can also mitigate risks. Networking with other experienced investors and legal professionals within the BiggerPockets community can provide further insights and strategies to safeguard your investments.