Chosing Insurance Beneficiary
I have an LLC which will be holding company for other LLCs, each of which will hold exactly one rental unit. When getting a landlord policy on a property, which of the following should beneficiaries:
o The parent company (the one that holds all the LLCs)
o The child company (the one that holds the insured proprety)
o Me & the other partners of the holding companies
It seems like the safest choice would be to make all three beneficiaries, but perhaps this is overkill and offers no additional protection over some canonical set. Maybe the insurance company limits the number of beneficiaries, so which of these entities absolutely should have the liability protection and which (if any) are unneeded?
This seems like a risky structure. The holding company as all the operating companies as assets and concentrates the exposure.
As to the insurance, it sounds like the operating LLC owns the land, so name it.
The lender would likely require it to insure then are protected.
There are no named beneficiaries for a rental dwelling hazard insurance policy.
There is the named insured who is the owner of the policy and the individual or entity responsible for the premium payments. If there is a claim against the policy, it can only be made by the named insured and the insurance company check will go to the named insured.
It there is financing in place, your mortgage company will want to be named as a loss payee in the event there is a total loss.