Series LLC + Insurance Coverage

[Craig Fairfield]

Need some perspective on insurance coverage as I'm unsure of the advice I'm getting from my insurance agent and lawyer.

We currently have 4 properties in their own respective LLC rolling up to a parent LLC. This is intended to limit any liability to just the business as well as to an individual LLC (property). This will protect the broader portfolio and our personal assets.

For insurance coverage, we have landlord (dwelling/fire) insurance for each property/LLC with $1M liability coverage each. However, I'm thinking of the worst case scenario with a suit of let's say $4M. How do we structure the best insurance coverage?

My agent mentions to go with excess liability for each policy and list the child LLC as well as the parent. I think an excess policy is more limiting than an umbrella policy. And I think listing the parent goes against the idea of having the parent in the first place which was to shield the portfolio of other properties. I'm not sure if by listing it, does it then expose the portfolio.

I'd prefer to get an umbrella policy for the additional $3M in coverage, but on that policy, I'd like to list the parent and all child LLCs.  For some reason, the insurance company won't write this as one policy but distinct ones with higher aggregate premiums when the exposure is the same.

Any thoughts on how best to structure the insurance coverage?

[Jason Bott]

@Jason Bilbrey the "multi property discount" is more of a Personal Lines discount and would be company specific, not industry specific.

Before doing anything, I'd suggest running these options past your current agent if you want to keep the same company.

Keep in mind, just because your current agent says it would be more expensive, it doesn't mean that another provider wouldn't be lower cost if you made the change.  

You can also quote those 3 locations with other carriers before making any changes.