An agent insures three brothers who all own apartment buildings, but all three are separate entities.

Q: "Is it possible to get excess coverage on a holding company although the three LLCs do not have common majority ownership?”

A: “This is a question for the underwriter, but as a general rule, there is no reason this cannot be done.

Traditionally, holding companies own assets but do not conduct any operations. Based on your question, you want to insure the operations—the individual LLCs—and protect the holding company as well.

Let's start by considering which policy or policies may currently extend coverage for the holding company.

Who are the members of each LLC? If the holding company is a member of each LLC, it is already protected under each LLC's commercial general liability policy because the definition of ‘insured’ includes the members of the LLC. It’s not necessary for each policy to explicitly list the holding company in order for it to have coverage, provided the holding company is a member of each LLC.

If there is excess coverage or an umbrella, the holding company should already have protection.

But maybe the real questions are: Excess over what? And excess for what? 

Depending on the relationship between the LLCs and the holding company, it may already have the desired GL protection. If the holding company is not a member of each LLC, the decision to provide excess coverage for just the holding company is up to the underwriter.”

Chris Boggs is executive director of the Big “I” Virtual University.

This question was originally submitted by an agent through the VU’s Ask an Expert Service. Answers to other coverage questions are available on the VU website. If you need help accessing the website, email logon@iiaba.net to request login information.