Reducing Litigation Risk

In a society where you can sue anyone for just about anything, litigation protection is important. In this article, I will relate what I've heard concerning litigation protection.

Important, I am not an attorney, insurance agent, or have any legal training. Consult with competent authority before making any decisions.

There seem to be three schools of thought among our clients.

  • Place each property in a separate LLC. Cost is about \$325/LLC/Yr.
  • Get an umbrella policy that matches your current coverage limits. We arepaying about \$60/Mo. for \$1M in coverage.
  • Do nothing

Separate LLC

The state of Nevada operates a self help site for businesses.

You will need a local agent (a Nevada resident) whose only function is to receive any official mail sent to the LLC. I am the local agent for many LLCs, and you are welcome to use me as your local LLC agent at no charge. The address on all my emails is that of my broker (this is a legal requirement). There is no way of knowing if/when I will change brokers, so please use the address below. This is a post box which I have had for many years.

Eric Fernwood
7345 S Durango Dr, #107-102
Las Vegas, NV 89113
702-358-8884

Umbrella Policy

As I understand, the purpose of an umbrella policy is to provide coverage when litigation exceeds your primary insurance limits. Just be certain that there is no "gap" between your existing policies and your umbrella policies.

Do Nothing

I am the local agent for many LLCs. Never, not once, in 15+ years have I ever received a single legal notice for any client's property. I believe the reason is that the laws of Nevada do not favor frivolous litigation. No matter which option you choose, add your property manager as a co-insured on your landlord insurance policy. Talk to your property manager; they can tell you how to do this. I believe the incremental cost to be about $30/Yr.

Remember

Remember that I have no expertise in this area. Seek component authority before making any decisions.