Skip to main content

We have a rental property that is a LLC. Do we need to purchase personal liability insurance?

Tampa, FL |
Attorney answers 3


The whole theory behind owning real estate in the name of a Limited Liability Company is to limit the liability of the principals of the corporation. Therefore, you are not required to carry any type of insurance to protect YOU as individuals. However, in the event that someone were to hurt themselves on the premises and sue the LLC for damages, that individual would be able to obtain a judgment against the LLC but would not be able to obtain a judgment against the individuals. On a separate note, you LLC should only own one property at any given point and should have a minimum of two (2) members (there is a Supreme Court case that holds under limited circumstances that a single member LLC is nothing more than an extension of the individual and that person can be found to be liable.) You may want an attorney to review your Articles of Organization and Operating Agreement to ensure that your are fully protected under the LLC Act. Furthermore, please be advised that the LLC Act has recently been changed and you need to ensure that your Operating Agreement is in compliance with same.

The hiring of an attorney is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualications and experience.


LLC’s, regardless of the state where they are filed, are excellent legal tools to hold and manage investment properties. They also isolate the risk generated by these properties. However, they do not
protect personal assets as for example bank accounts or your primary residence.
A plaintiff (a tenant, trespasser, whoever) may always try to pierce the corporate veil by holding you personally responsible by theories as negligence or gross negligence.

Therefore, and depending on the value of your property, the revenue it generates and your personal net worth, I recommend you to put the sole proprietorship of the LLC 's that control your properties in an entity that is specifically designed for asset protection purposes, such as an asset management limited partnership that is filed in a state with strong charging order rules and a legislative history as AZ.

The Asset Management Limited partnership that controls the LLC's can hold directly your liquid assets (bank and brokerage accounts). This way, you are protecting your investment properties and isolating the liabilities they may cause, and at the same time, protecting your liquid assets.

An extensive umbrella policy should also make part of your asset protection strategy.

Douglass Lodmell is the nations #1 Asset Protection attorney and has clients in all 50 states, protecting over $4 Billion in client assets. Answers given by him in this forum do not establish an attorney-client relation. He advises to seek a specialized attorney in the area of your interest for legal representation.


Your question is a little confusing. Did your purchase the property from an LLC? Did you purchase the LLC rather than the real estate from the seller? Did you form a new LLC to take title to the real estate you purchased? The answer to your question will depend on you answer to the three questions above. Owning investment real estate can be confusing. Rather than relying on advice from an online forum, you should consult a lawyer in your area who is experienced in both real estate law and business organization. Your lawyer can explain the complexities to you and help you find the best structure for owning your investment real estate.

Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after completing a comprehensive consultation in which all of the relevant facts are discussed and reviewed.