I had a call this week about insurance when a property has been titled in an LLC or Trust. Since insurance is such a crucial part of asset protection planning, I thought it would be good to share my thoughts on the issue more broadly in this week’s post. First, it is important to discuss the change in ownership with your qualified insurance professional as no general advice is going to be right in every situation. Secondarily, it is important that the Trust, LLC, or other business entity be covered by insurance. However, simply naming the LLC or Trust as an insured may not be possible and if it is, it may create liability gaps for the occupants. Therefore, with a personal residence, for example, it is important that both the individual residents of the home and the owner be named as insureds or additional insureds. Sometimes the Trust or LLC may be ineligible for coverage without a special endorsement. In this event, you should explore an endorsement to your policy with your agent.
Often decisions in one area can have ramifications in another. Using a knowledgeable insurance professional to assist you in this area is the most important choice you can make. That person can help you make sure you avoid unintended consequences in your insurance decisions.