Owned Building with Several Types of Businesses in It

[NCAgent]

Hey guys,

I have an interested case here and I'm not sure how to handle this.

I have a building owned by a property company, LLC. That LLC is OWNED by a mortgage company, LLC that occupies the building owned by the property LLC. Both of these companies are owned 100% by the same owner. To put another way, one company (mortgage) owns another company (property company) which owns that building, and the mortgage company is INSIDE that building. This is a 45k sqft building that is NOT partitioned- this is not a virtual office setting, or a strip plaza, or anything like that.

Inside of this building there are a few businesses. The mortgage company, a financial services agency (both owned by the same owner), a law firm (not owned by the owner), and an internet startup company (not owned by the owner). The law firm and the internet startup company do not have a lease agreement and don't provide rent, the building is just HUGE and the owner is agreeing to let them stay there rent free. In exchange, with the law firm, I think they give some reduced fees for closing and for the internet startup I think the owner just knows the people involved and wants to help them out. There are no "sectioned" quarters. The people all use co-mingled cubicles and common areas are easily accessible. There are general areas where you know who is where but there is no defined threshold for one business to another.

So my question here becomes: How the hell do we cover the building if people get hurt? By people I mean both the people INSIDE the building and then people coming to visit for business/please on behalf of ANY of these businesses.

Since the property LLC owns the building, if anyone gets hurt will the liability policy for the property LLC cover them? If anyone else is named in the lawsuit, do they need their own insurance?

I'm basically trying to make sure that in terms of bodily injury and property damage that all parties are protected as well as possible. The owner believes that no one in the building needs insurance (besides their own specific ones like E&O, professional liability, etc.) since he has the mortgage company and the company owning the building as named insured's on HIS policy. I don't know how to handle that.

Professional liability and whatnot is a different story, I'm more concerned about a general BOP for liability and PD.

Thoughts are appreciated, thanks! Let me know how I need to clarify.

 

[pbbaseball]

i'll be interested to see the out comes and recommended strategy on this one. I don't do much commercial work, so any time I get one that I don't know, I tell them t go elsewhere. Time for me to start learning these crazy cases!

 

[NCAgent]

Me, too. I wonder if it should be that all of the companies owned by one guy (3 total, the mortgage, property management, and agency) should be named insureds on the policy and then the other two need something else.

I would be interested to see how this plays out since I haven't seen it before.

 

[Guest]

Interesting, first of all, call your underwriters, and let them decide, and sign off on it, I bet each company would be different.

My spidey senses tell me, you pick the owner LLC policy as the structure coverage, then all of the other properties would have their own GL policy with TI and added coverages.

UNLESS, You find a carrier that MIGHT allow all of the other companies be added as a additional insured somehow in the policy.

You have some work to do, first thing first, I would make sure its a decent premium to make up for the time and effort this might take you. If its a $2 or $300 commission, is this going to be worth your time and effort of numerous hours of time.......

 

[NCAgent]

Interesting, first of all, call your underwriters, and let them decide, and sign off on it, I bet each company would be different.

My spidey senses tell me, you pick the owner LLC policy as the structure coverage, then all of the other properties would have their own GL policy with TI and added coverages.

UNLESS, You find a carrier that MIGHT allow all of the other companies be added as a additional insured somehow in the policy.

You have some work to do, first thing first, I would make sure its a decent premium to make up for the time and effort this might take you. If its a $2 or $300 commission, is this going to be worth your time and effort of numerous hours of time.......

It'll be a BoR more than likely on a 15k account. That's what it is now so it is worth it.

So EACH of these entities need their own coverage? Where on earth did the client get such an idea for the insurance then? It seems to weird to make up but too specific to just guess, too.

What is TI, RBA? And I don't know if I'm reading it wrong when you say properties, but ALL of these businesses are in the same property building. So when you say the owner you mean the LLC for the property and the mortgage company since they are both owned by the client? So the agency (also owned by the client), law firm, and startup company would all need their own separate coverage?

And to understand, the alternate is that ALL of them need to be listed as a named insured on the policy and each one that IS NAMED would be covered, but all the other ones would need a separate policy?

 

[greatfish]

One policy for both the LLCs. Common ownership between the two so they are combinable on one policy.

Lawyer needs a little BOP of his own for liab and contents.

Internet company needs a BOP of his own too, for liability and contents.

 

[NCAgent]

One policy for both the LLCs. Common ownership between the two so they are combinable on one policy.

Lawyer needs a little BOP of his own for liab and contents.

Internet company needs a BOP of his own too, for liability and contents.

And what the agency also owned by the owner? All 3 on one policy?

 

[CC1975]

Hi NCPCLHnoob.....

I would suggest you email your explanation as you have laid it out here, along with any other underwriting specifics you have presently.... any website links of the businesses they can examine... along with any photos you have ...directly to your assigned underwriters for the carriers you have access to....and let them tell you if they will quote the risk and how to do it.

After all...we can speculate here but it's their call.

I am learning my underwriters appreciate this approach. Just my two cents. Good luck.....this is a crazy one...I'd also like to know how it comes out.

 

[greatfish]

And what the agency also owned by the owner? All 3 on one policy?

Yes, all 3 on one policy. I would probably have the first named insured be the property LLC with the additional NAMED insureds (not additional insured) being the other 2 entities (Financial services business & Mortgage business).

Now the E&O side, you will most likely need separate policies.

The other 2 businesses (lawyer and internet comp) should have their own policies for their coverage. This will be pretty cheap probably minimum premium for both. You can't name them additional insured on the Property LLC policy as they have no insurable interest. You can and probably should name the Property LLC (and various entities) additional insured on both the lawyer' BOP and internet guy's BOP since they are tenants.

Of course the Lawyer needs E&O (Malpractice) and the Internet guy should have Tech E&O but most don't.

 

[iiinycboi]

i had a case like this, the building coverage was easy, just listed all the llcs as additional insured,

but finding a carrier that would take liability coverage was hard. basically they tell me it will be a claim hell issue. each carrier will try to push the liability on the other.

i think one company wanted a map of exactly which section belongs to which, but then the issue comes up if the client of either company is walking and trip on the other companies "section"


also couldnt the the LLC on the premise buy a bop policy to cover the whole floor? and have enough business get their own for their property and their liability other than getting hurt on premise