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Michael Lykken, Esq
Michael Lykken, Esq,
Category: Real Estate Law
Satisfied Customers: 103
Experience:  Partner at Soares & Lykken, Attorneys at Law
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I own and manage properties in California and considering

Customer Question

I own and manage properties in California and considering buying an umbrella insurance. The question is personal or commercial? and what limits of liability?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Michael Lykken, Esq replied 1 year ago.

Hello, my name is ***** ***** I am a licensed California attorney. I would be more than happy to help you with this. Please be advised that I can only provide general advice in this forum. If I am online I will generally respond within an hour. If I am not online I am either at court or in a meeting, in which case I may not be able to get back to you until the evening.

Now on to your question. First, do you only manage properties that you own? Second, do you have any employees or people that work for you? Both of these questions could have some bearing on this. If you own the properties you manage and don't have any employees, you could probably use a personal policy. However, a personal liability insurance policy could have some liability exclusions that would not necessarily work for you, so you would need to look at the specific terms of the policy. Another option is to form a business entity such as a family LLC or family limited partnership that would provide some shielding from you from liability.

Customer: replied 1 year ago.

All properties are managed by a corporation. The corporation has employees and also manages other peoples' properties. I'm the sole shareholder of that corporation.

Some of my properties are apartment buildings. Would a personal umbrella protect such claims? If not, then would I need both commercial and personal umbrellas? How do i determine the limits?

Expert:  Michael Lykken, Esq replied 1 year ago.

First, so I assume that your corporation is licensed by the Bureau of Real Estate so that you can manage properties. The corporation would generally protect you from personal liability for other properties not owned by you. However, if you are on title to properties that are managed by the corporation you own, you may want to consider a personal umbrella policy for those properties since being on title can expose you. You could get a commercial policy for the corporation. The limits are up to you, but look at what your exposures could be and that would provide you some guidance. If you are just dealing with property management you probably don't need a large limit since your exposure really isn't that great. You could thus be fine with $500k-$1 million.

Expert:  Michael Lykken, Esq replied 1 year ago.

Hello, I hope you found my service helpful. If you need further clarification I am happy to help you with this. Otherwise, please understand that I only receive credit for this if I am rated. So if you could please rate my service I would appreciate it. Thank you!