We do! Here is a clear definition and breakdown of how we write LLC's and Trusts and key notes to take in account when quoting LLC's and Trusts.
What’s the Difference Between an LLC and a Trust? Can You Cover Properties Owned by Multiple People?
LLC (Limited Liability Company):
An LLC is a legal business entity often used to hold rental or investment properties. It offers liability protection to its members (owners) and may be structured with one or multiple owners. However, LLCs are considered commercial in nature, especially when multiple unrelated members are involved.
Trust:
A trust is an estate planning tool used to hold personal assets for the benefit of specific individuals. Trusts are commonly used to manage property ownership among family members. While trusts can also have multiple members (such as siblings or parents and children), the key distinction is that they are designed for personal, not business, purposes.
Why We Cannot Write Multi-Owned Properties Held in an LLC:
Properties owned by an LLC with multiple members are classified as commercial risks and fall outside our personal umbrella underwriting guidelines. We do not offer coverage for LLCs with multiple owners due to the legal complexity and commercial exposure they introduce.
What About Trusts With Multiple Owners?
We can consider properties held in a trust with multiple members as long as all trust members are related family members and the trust is used solely for personal, non-commercial purposes. This type of ownership aligns with our personal lines risk appetite and is acceptable for umbrella coverage.
Summary:
LLCs = Business entity, commercial use, multi-owner LLCs are not eligible.
Trusts = Personal estate planning tool, family ownership allowed, family trusts are eligible.
Always ensure the named insured(s) match the trust or ownership entity, and provide documentation if needed during underwriting.