How to handle insurance post flip?

[Alex T.]

I'm curious what people do to protect themselves post-flip. I am mostly wondering about protection from issues that arise in a property years after someone purchases. I work with reputable contractors with lots of experience, I trust them, and they stand by their work (at least for the first year), but I do not have enough construction experience to know if something hasn't been done the right way.

I've been doing each property in its own LLC and then shutting each down after the sale. Do you find that that's enough protection? My insurance broker said that I could get a full GL policy that would cover me for ensuing damage due to property defects and injury claims that arise from issues post-sale. It's not super cheap - and it's somewhat limited given the ensuing damage clause ($2500-3500/year). Another option would be to do a 1-2-10 home warranty upon purchase. And I guess the last line of defense would be my contractor's GL policy (assuming he is still in business).

I just don't want to be in a vulnerable position years after selling a property, especially if the contractor is no longer around. And of course, I also want to make sure that the buyer is fully protected. What do people typically do for post-flip insurance? Thanks.