Getting serious about your business or asset protection planning may involve some legwork, such as reevaluating your insurance policies.
Colin Ley is an asset protection attorney and the creator of the PREP Trust® and Better LLC™. He is also the co-founder of LayRoots (along with with partner in life & business – Shreya Ley)
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Good evening, folks, Colin and Shreya Lay here of LayRoots.
The law firm.
That does asset protection and estate planning.
Here’s something I wanna talk about today, Shreya.
Tell me, lay it on me.
When you start getting serious about your asset protection, business planning, there’s gonna be a little late work involved.
Oh yeah, homework.
Yeah, so here’s what I’m thinking about, Shreya.
If you are conducting some sort of business activity, and you start to create entities to mitigate those risks,
As you should.
Maybe you go from a sole proprietorship to an LLC.
You may need to reevaluate your insurance.
Or not reevaluate, but buy some new policies, change those policies.
Maybe you can’t squeak in under some of those exceptions.
Well, that’s the thing. While that might seem like a headache, maybe another expense, maybe it will be more expensive than the previous policy. But I think of it as good, because my concern would be–
That the old policies really wouldn’t cover you anyway. I know, Colin, we’re on the same page here.
I want everyone else to be on the same page too. Because I remember, one time back in the day, take me back, 2008.
I knew you then.
That is in the time when we knew each other. It was no longer B.C., Before Colin.
It was during Colin.
It was A.D., After Dating.
So New Orleans, I don’t know if you’ve heard, has a problem with flooding.
Not just with hurricanes, but also torrential downpours.
Yeah, I mean the streets get backed up, it’s not just a hurricane situation. This happens in Houston as well, for people in Texas. Worse in New Orleans, though.
One day it flooded. I lived in a basement room, my room flooded with water, and what did I keep on the floor next to my bed, but my laptop. I don’t remember the details now that I’m telling the story. But I had insurance on it, and I was like, “This is great, I have insurance.” I called to make a claim, I thought this was the best policy I had, this is what they told me to have, and then they asked me some questions, and one of those was if I ever used the computer for some of the work I occasionally did, some occasional paid work, and I told them yes, and they said, “Oh. “Oh, I hate to tell you this, “but your policy is not gonna cover this. “You see, this was a personal laptop you had, “and since you’ve used it one time at least “for a business function, “your claim is denied. “I am so sorry.”
Yeah. And when we were in New Orleans and in law school, I worked at an insurance defense law firm, and they spent a lot of their time trying to figure out how to deny claims.
Yeah. So if you are investing–
Well, support the insurance companies’ denial of claims, if we’re gonna get technical about it.
So if you are investing in real estate, and you are leasing it, or doing Airbnb, short-term rentals.
Anything like that. If you have policies that are targeted towards people who maybe just have a vacation home, a second home, just a personal–
A personal policy.
A personal liability policy, that might seem all in order, but if something happens, if someone’s injured on the property, somebody makes a claim against you, my fear would be, then, that the agent asks questions, “Oh, who got injured?” “This person who was renting our place from us. “Yeah, we make some money renting out these properties.” I think at that point, you might be in for a surprise.
Yeah, the insurance agent may deny it. And to bring it back around to what we started talking about, is that some people may see that as a deterrent for forming those LLC’s and getting things set up properly with their asset protection and business planning. But in reality, it’s probably just bringing to light some issues that were already there, and that you–
Some false securities.
Yeah, some false sense of security. And so now, you can get that stuff right too.
And be in a better place.
Than when you started.
I like it.
Well, thanks for watching. If you found this video valuable, consider subscribing by clicking right there. You can see any future videos we put out. Thanks, Shreya.
See you next time.