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Insurance questions

IWillLiveThroughIt

8 years ago

History:

My father (recently deceased) owned a construction company (LLC) and built custom homes with a buddy of his. The company is still a legal entity (as all legalities were handled after my father's death). The company's insurance policies have expired. For construction loan purposes, I am using the company as the "builder of record" for my personal home build. My dad's former partner is helping me with the build for a flat fee. Once my home is built, the business will be shut down. I am in the process of securing Builder's Risk insurance for the company.

Questions:

Does the company need a General Liability policy since I will not be suing myself?

In lieu of General Liability for the company, what can I get to insure myself against injuries to kids and others who may get hurt while walking through my property while it is under construction?

Are there any other considerations?

My current home owner's insurance does not extend to the new property (I will double check this tomorrow.)

For the most part, we will be using fully insured sub contractors, but I know there will be times that we will be using subs that are not insured (hiring a guy that works for a company, etc., but the guy is doing my job "on the side.")

I would really, really like to avoid the end of year audit that occurs with a General Liability policy, so if I don't need it, I'd rather not have the headache or expense. If I need it, I'm prepared to get it.

I have researched this issue to death, and I'm still at square one. Please help.

Thanks!

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Comments (3)

cpartist
8 years ago
I'm wondering if this question should be cross posted in the financial forum?
User
8 years ago
First, talk to an insurance agent. You might be able to get builders risk insurance in your name and include the company too.
IWillLiveThroughIt thanked User
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In my experience it might be hard for you to get insurance on the property. The builders insurance should cover most things like theft or the house burning if they have builders risk. If they don't make them get it. It prob won't cover theft of anything stored in the garage if it is yours and not bought by the builder. You could probably get some type of home owners ins on the garage though which should cover your property. Your builders general liability and workers comp will cover anyone getting hurt. I had a hard time getting those coverages since mine is owner/builder. Nobody wants to insure that!
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It is likely that those that get it through their spouse would no longer be eligible to do so if they were offered insurance through their employment all depends on that insurers rules. Have you checked what the premiums would be? It has been a long time since I did this, but for my exes business we offered the employees full insurance and the cost was actually less than $2400/year per employee. I guess costs have gone up a lot in the last 12 years. It was an HMO, but it was really good coverage and no referrals needed. I think in this case you don't really have much of a choice as to being able to make all employees happy. I don't think you can. In larger companies the choice is get the insurance or not - there is no other option. Guess you can only look at what the other options are for them as to if they went somewhere else what would they get. Maybe looking at what are the employees options elsewhere if they were to switch jobs would help you see if you need to offer something else or not.
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Just a side note.... Even the spouses and dependents of our Military members must comply with the laws of the state they reside, even tho the service member can keep their 'home of record' license and plates. As a 24 year "camp follower", I have had to be licensed in more states and countries (yes, countries) than I can count this morning.....while DH retained his 1954 drivers license until he surrendered it here in Oregon in 2004.(I could be wrong about that year, as he did have a different class license for Ca for some years...and may have had a newer one after he retired.) I ran into this problem when DH was serving overseas and I was living in a different state....much to my surprise, I needed both plates and matching DL asap. I do wonder if any of those laws have been changed (for our Military since the events in the Middle East)...but somewhat recently DD had the same problem when in Florida with a car (in her name) and DH stationed there....including bill of sale and other stuff.
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You were lucky that the company covered it! I just had a dead tree removed and it was in a tricky spot--between my carport and my neighbor's garage. I couldn't believe the previous owner allowed that tree to grow there. My house was built in 1939 and the previous owner lived here for the last 30 years before I bought it. Anyway, they had to cut sections at the top and gently lower by rope to the ground. It set me back $850, but it would have been worse to have it fall and damage both structures. My neighbor on the other side has a live pine tree leaning my way. I want to ask them to have it removed, because when it falls, it's going to hit my home, which I spent a year renovating.
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golfergirl29
8 years ago
I agree with JDS-- you need to talk to an insurance agent (or two) to find out the options in your state. You may not sue yourself for property damage, but I could easily see bodily injury and medical payments becoming an issue. You also get legal protection, so if you are sued, even frivolously, the company steps in. Even one non-insured sub could come after you. I am building a home and have a separate dwelling under construction (builders risk) policy which switches over to a homeowners at the end. It's relatively cheap to pick up an umbrella policy or increase the liability limits, which gives you additional coverage for those possible lawsuits. I can't imagine a company being allowed to be an additional insured on a personal policy and the company having nothing else. Since the company is only doing one job, it should be easier to accurately forecast your payroll or gross revenues and not have a surprise at the end of the year audit. It may just be the cost of doing business.
IWillLiveThroughIt thanked golfergirl29

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