Real estate insurance is a topic that is vital to any successful real estate investment, yet it’s a topic that many property owners often overlook until it’s too late. In the event of a loss, whether it’s a partial or a complete loss, if your property isn’t insured properly, your business could be financially devastated. Making certain that you have the right type and sufficient amount of insurance allows you to protect against potential losses. Part of making sure that you have the right insurance is understanding the various categories of real estate insurance.
Flood Insurance Property
This type of insurance is typically only necessary if your property is located Read more
Whether you need property insurance for a building that you recently purchased or you’re shopping around for new insurance, you may encounter a variety of terms that leave you somewhat puzzled. One of those terms is coinsurance.
It’s not unusual for policyholders to face a penalty if they fail to purchase a sufficient amount of insurance. That penalty is referred to as coinsurance. You might rightfully wonder why an insurance carrier would care about the amount of insurance that you purchase. The reason is related to the ratio of insurance to value, or the limit of insurance to the value of the subject property. Read more
Signed commercial leases are often the result of a significant amount of negotiation between multiple parties, including the landlords, brokers, tenants, and their attorneys. The goal of each party in this type of negotiation is to pass on as much liability and responsibility for the property as possible to the other party. Of course, it’s virtually impossible for all parties to eliminate all risk. At this point during the negotiation, the subjects of insurance coverages and clauses typically arise. The amount and type of insurance required as part of the clause in a commercial lease will depend upon the type of lease that’s involved. For this reason, it’s extremely important for both property owners and tenants to understand exactly which type of lease is involved in the relevant negotiations. Read more
The underwriting process for commercial property insurance can naturally be quite complex. If you’re a building owner seeking commercial real estate insurance for the first time or if it has been awhile since you’ve had to purchase insurance, you might find yourself somewhat surprised at the massive amount of data that goes into underwriting an insurance policy.
Much of the necessary property underwriting information that goes into preparing a policy is known as COPE data. This stands for Construction, Occupancy, Protection, and Exposure. When you complete a commercial real estate insurance application, you will typically be required to submit most of this information.
Let’s take a look at each element of COPE. Read more
All real estate transactions can be complex, but commercial real estate deals can often be fraught with even more requirements and contingencies, all of which have the potential to stall the entire process. Beyond the financing itself, one element that most often threatens to kill commercial real estate deals before they close involves commercial insurance. Unfortunately, when an insurance problem arises due to lack of compliance, the delays can become tedious and lengthy. This most often occurs because the mortgage broker in question is not completely familiar with the requirements as they relate to commercial insurance. Read more
It’s a subject that no one wants to think of, and yet, if you own a commercial property, you ought to think about whether it’s insured against acts of terrorism. The 9/11 terrorist attacks resulted in almost 3,000 deaths and approximately $44 billion in insured losses in today’s dollars. While we all pray that such an attack will never again take place, commercial property owners must make certain that they are adequately protected in the event that the unthinkable should occur.
Terrorism Risk Insurance Act and What It Means for You Read more
Along with determining the different types of insurance that you need in order to protect your business and property, it is also important to accurately assess the amount of insurance coverage that you need. Figuring out how much insurance coverage that you need for your commercial property can be a bit of a balancing act.
On one hand, you certainly want to ensure that you have enough coverage. At the same time, it’s important to understand that too much coverage can also be problematic. Overspending on insurance coverage can add up quickly and detract from funds that could be spent elsewhere on your business. Read more
Whether your building is vacant due to a sluggish economy or for some other reason, it’s important to ensure that it’s kept as safe as possible. Vacant commercial buildings can create a number of risk-related challenges. Regardless of whether your property is vacant for only a few days or a few months, the risks related to a vacant building can result in the potential for expensive losses and liability. By following the steps listed below, you can identify potential hazards and learn to reduce those risks while controlling losses. Read more
When you choose an insurance policy for your commercial property, a number of factors need to be taken into consideration. Among the most important factors to consider is – of course – what is covered by the insurance policy. Along with the basics, there are three specific areas that your policy should address, but which most insurance policies unfortunately do not. Those areas are lead paint liability, tenant discrimination, and crime coverage.
Lead Paint Liability
In the worst-case scenario, a building owner recently lost his 35-unit multifamily apartment building in the Bronx. How did this happen? One of his tenants filed a lead contamination lawsuit against him. Any building constructed prior to 1978 has been exposed to lead poisoning contained within the paint. The Environmental Protection Agency (EPA) recently tightened the allowable amount of lead that can be contained within children’s bloodstreams. This has resulted in a significant increase in the number of lawsuits brought against landlords for lead poisoning. To make matters even worse, there are only a handful of insurance companies that will actually cover lead liability. This makes it even more important to ensure that your policy includes lead liability insurance coverage. Evergreen Insurance offers policies which include lead liability insurance. Read more
The necessary insurance coverage for a commercial building can be a large expense. Among the factors that affect the cost of a commercial insurance premium are liability. In the event that your building has an increase in claims, insurance premiums typically increase as well. Fortunately, there are steps that can be taken to decrease your building’s liability while simultaneously reducing insurance premiums.
- Make certain contractors are insured. From time to time, you may need to have maintenance work performed on your building. Always make a point to ensure that any contractor who is performing work on your property is properly insured. All contractors should have worker’s compensation, liability insurance, auto insurance, and umbrella insurance.