Join John Skabelund as he explores the critical role that liability insurance plays in asset protection with guest, personal and commercial consultant, and independent insurance broker at Garry L. Johnson & Associates, Kurtis Shepherd.
Kurtis has been helping groups and individuals with their insurance needs for more than 15 years. He specializes in group benefits, individual insurance, Medicare, P&C insurance (home and auto, etc.) and cyber liability insurance.
In this episode, discover how specialized liability insurance protects your assets and legal standing, addressing often-overlooked risks for business owners, high-earners, high-profile clients, and real estate investors.
Podcast Overview:
John Skabelund sits down with Curtis Shepard of Gary E. Johnson & Associates to explain a topic that is often overlooked in asset protection planning: insurance.
Asset protection is not only about entities and legal structures. Insurance is frequently the first line of defense, and Curtis breaks down the essentials in plain language, including what liability insurance does (and does not do), how umbrella policies work, and what real estate investors and business owners should know as insurance pricing and availability shift across the country.
What You’ll Learn in This Episode:
Curtis defines liability insurance as coverage that protects you or your business financially if you are found responsible for injuring someone or damaging their property. It generally covers two major items:
- Defense costs (legal counsel and legal expenses)
- Settlements and judgments (amounts paid to the injured party)
A key clarification from Curtis is that liability insurance does not cover your own losses or your own property damage. It is designed to protect you when a claim involves someone else.
“Liability insurance never covers you or your own property. It exists to protect you when someone else is injured or their property is damaged.”
— Curtis Shepard
John adds an important legal concept that helps frame the conversation: insurers commonly have a duty to defend and a duty to indemnify. That means the carrier may both provide the legal defense and pay covered claims, depending on the policy.
Common Types of Liability Coverage
Liability coverage shows up in nearly every area of life and business. Curtis walks through the most common policy categories and who typically needs them:
- Auto insurance for drivers
- Homeowners insurance for property owners
- Renters insurance for tenants (liability plus personal property)
- Business owner’s policy (BOP) for small businesses (general liability plus business contents)
- Commercial package policies for larger companies (more customizable coverage)
- Professional liability / E&O (errors and omissions) for service professionals (doctors, attorneys, CPAs, realtors, and more)
- Product liability for businesses that manufacture or sell products
- Directors and officers (D&O) for business owners and decision-makers, including many nonprofits
The big takeaway is that the “right” mix depends on your lifestyle, assets, industry, and risk exposure.
The Devil in the Details: Exclusions and Industry Specialization
One of the most practical parts of the episode is the discussion about policy exclusions. Curtis explains exclusions as the areas where the carrier is saying, “We do not cover claims tied to these situations.”
John sums it up simply: exclusions are often where people discover too late that the coverage they assumed they had was not actually included.
“The devil is always in the details. Exclusions are where people find out they’re not covered after the claim is filed.”
— John Skabelund
Curtis also stresses something many people miss when picking an insurance professional: your broker should understand your industry.
A broker who writes a little bit of everything may not recognize the specific risk issues inside a law firm, medical practice, construction company, or real estate portfolio.
What to look for in a strong broker:
- annual reviews and proactive check-ins
- a thorough risk and coverage checklist
- clear explanations of limits and exclusions
- a broker who can identify blind spots, not just quote premiums
Curtis shares that claim denials are rare when policies are built correctly, but they can happen when key details are missed, like lease terms, hold harmless clauses, or gaps created by the way an agreement is structured.
Real Estate Investor Insurance: Landlords, Renters, and Local Risk
For real estate investors, Curtis highlights two major themes:
Examples discussed include wildfire-prone areas and hurricane risk regions. Curtis encourages investors to understand what coverage looks like in that location before purchasing a property.
- Renters insurance protects the tenant’s liability and personal belongings.
- Landlord or dwelling policies protect the property owner’s liability and the building itself.
Additional insured: an important landlord strategy
Curtis explains why landlords often require tenants to name the owner or the owner’s LLC as an additional insured. That can help route certain liability exposure through the tenant’s policy first, depending on the claim.
LLCs and Insurance: Do Not Forget to Update the Policy
A common real estate mistake is forming an LLC, transferring title to the LLC, and forgetting to update insurance.
Curtis explains why the checklist matters: the policy needs to match the ownership and the risk.
That includes properly naming the LLC and, where appropriate, adding related entities such as a trust or a holding company as additional insureds.
Short-Term Rentals Are a Different Risk Category
John and Curtis discuss why short-term rentals can be harder to insure and why disclosure matters.
Curtis explains that frequent guest turnover increases liability exposure and can bring risks such as:
- guest injury claims
- property damage claims
- illegal activity or disturbances
- personal injury claims involving non-guests
Curtis also notes that some platforms offer insurance-style programs, but he recommends reviewing the exclusions closely.
John adds a practical framing: short-term rental owners are often operating in a hospitality-style business environment, and insurance carriers treat that risk differently.
Auto Insurance and Adult Children Living at Home
A common question John sees is how to handle adult children who live at home and drive vehicles.
Curtis explains that many carriers require driving-age household members to be accounted for on the policy unless they are properly insured separately and not using household vehicles.
A critical point: auto coverage usually follows the vehicle first, and then excess exposure can involve the driver’s policy, depending on limits and circumstances.
Umbrella Policies: The Extra Layer Most People Need
Curtis explains umbrella coverage as an additional layer above underlying policies like auto, homeowners, and general liability.
Umbrellas can exist at a personal or commercial level. They matter most in catastrophic situations where underlying limits are not enough.
John and Curtis also discuss a key nuance:
- some umbrellas have defense costs that reduce the available limit (self-depleting)
- others provide defense costs outside the limit
That policy language can be the difference between having the full liability limit available or having it reduced by legal fees.
Curtis’s stance is clear: umbrella coverage is valuable enough that, in his practice, clients who decline it sign a written acknowledgement.
“Umbrella insurance is lawyer insurance. It’s there when everything else runs out.” — John Skabelund
A Real Estate Portfolio Question: One Policy vs. Separate Policies
John raises a real-world scenario: a holding company LLC owning multiple property LLCs.
A cost-saving suggestion sometimes proposed is insuring everything under one policy at the holding company level.
Curtis warns that this can create a major risk concentration.
- one claim could put the whole portfolio into the same fight
- separate policies help keep liability isolated at the property level
He also notes the administrative convenience argument for a single policy, but agrees that the asset protection principle of risk separation is a strong reason to keep coverage separate.
The Current Insurance Market: Rising Costs and Fewer Options
Curtis describes an industry facing major pressures: natural disasters, shrinking carrier options in certain regions, and regulatory constraints that affect rate adjustments.
The result in many areas is higher premiums, tighter underwriting, and more exclusions. Curtis also notes that carriers may continue to exit higher-risk markets.
Key Takeaways
This episode reinforces a simple truth: insurance is not optional in a real asset protection plan.
If you are a business owner, real estate investor, or high net worth individual, Curtis’s advice comes down to this:
- prioritize coverage quality over price
- review policies annually
- work with a broker who understands your industry
- watch exclusions and policy language closely
- add umbrella coverage to reduce catastrophic exposure
As Curtis puts it, it is the classic choice: pay for protection now, or pay far more later when a claim hits.
Special Thanks
Special thanks to Curtis Shepard of Gary E. Johnson & Associates for sharing practical guidance on liability coverage, umbrellas, and investor insurance strategies.
To learn more about asset protection and legacy planning strategies, visit UltimateAssetProtection.com.