Advice

[anth987]

Please refer to the diagram below to better understand my situation. I'm finding it remarkably difficult to fully grasp exactly what policies I should be getting, how much should be compartmentalized in separate policies vs grouped in a single one, how to even get coverage for certain things that I technically do not have experience in, etc.

Diagram

I recently formed a general partnership (A) with two other individuals. They are both silent partners and I am the active operator of our business. "A" owns three LLCs (pass-through), which each own various investments. "B" owns traditional real estate for rental purposes. "C" owns raw land in the permitting phase of a major commercial development (hospitality/events), and "D" owns a riverboat currently undergoing major remodel and to be used as a short-term rental dockside (stationary). On top of this "A" owns 80% share of "E", which owns a boutique hotel. The operations of "B", "C", and "D" are or will be run by my own personal "property/project management" company "F". "F" is a passthrough entity. Currently, I think this is what I need, but I'm struggling a bit with the nuances and overlap.

"A" needs a hefty umbrella policy

"B" needs to hold renter's insurance on each property, either individually or collectively on one policy. At enough under ownership, "B" will likely benefit from an umbrella policy as well.

"C" needs to hold some sort of general liability associated with the development and then once complete and the business is running, "C" should hold some nature of hospitality or event venue coverage.

"D" needs strong general liability specifically covering marine risks and likely should have some sort of renter's insurance on top and as well some sort of boat insurance?

"E" needs traditional hospitality insurance

"F" needs some combination of property management and general contractor insurance. It would likely benefit from its own umbrella policy, but since it's pass-through, maybe I should just get that personally.

Does this sound right? Seems like a lot of policies. I am definitely wondering if I'm overdoing it and if a huge umbrella policy with several riders on "A" would just cut it.

Thanks!

EDIT: All businesses are located in New York.

 

[davelew86]

@anth987 No, this doesn't sound right because you understand enough about insurance. You need a lawyer and a good commercial insurance agent, in that order.

Your "huge umbrella policy" will leave all of the other entities uninsured unless there is an insurable interest that you didn't disclose. That's not obvious from this setup.

This is far beyond the scope of this subreddit, and you are not going to DIY this, especially in an undisclosed location.

 

[anth987]

@davelew86 The "huge umbrella policy" I mentioned wasnt my inclination. It's literally the last sentence of my writeup after a lengthy list of the policies I believe I need.

I have spoken with multiple attorneys, insurance brokers, and CPAs regarding the many many questions that this complex structure presents.

What I have found mostly though is that I must personally have a solid understanding of what policies I need for each of the businesses individually, even if I wish it could be done all under one roof so to speak.

 

[davelew86]

@anth987 Again, you need an experienced commercial insurance agent/broker to get this done. There are multiple policy coverage forms that you need (i.e. CGL, Marine GL, Umbrella, Bumbershoot) that cannot all be lumped together. The hospitality and contracting exposures may be on the same coverage form but not the same policy.

You have at least $1M in assets exposed here, if not significantly more. You are far beyond Reddit help. I do complex commercial liability for a living and this would take me a while to untangle if your risks were on my desk.

 

[anth987]

@davelew86 Thank you, that helps a lot. Maybe I'm speaking with the wrong brokers then. I've spoken with multiple commercial agents that have essentially looked at me and then asked what sort of policy I'm looking for. It seems like I overwhelm them when I present the whole pie in this manner, so I was trying to siphon it down.

You don't happen to broker in NY do you? If so, I'd be more than happy to have a preliminary conversation with you.

 

[davelew86]

@anth987 I’m a wholesale broker, not retail. And you should keep looking for real retail brokers, not internet randos. Try the big names like MMA, Aon or Gallagher. They can help you better than most main street brokers.

 

[anth987]

@davelew86 Haha I certainly know better, but youre about the first person in the industry that's even considered the possibility of handling the whole pie. It's been quite the fiasco since creating this partnership. Thanks for the suggestions though. I've mainly been speaking with brokers local to my various projects. Maybe that's been my mistake.

 

[davelew86]

@anth987 One more thing - if any agent suggests that your construction exposures should have anything exclusions that are Action Over, Injury to Subcontractors or Labor Law without giving you an option without those exclusion, run the other way. NY construction is expensive for a reason, and state law makes you strictly liable for contractors working for you as the job owner. You get out of that via your contracts (which is why you need an attorney and don’t sign the one from your GC or subs), but you still need the coverage.

A good agent will explain that in more detail.

 

[anth987]

@davelew86 thank you. You've been very helpful

 

[anth987]

Also, everything is in the state of New York. My apologies for not including that. Absolutely meant to in the original post