Owning an apartment building can be a financially and personally rewarding experience. It can also be as risky as swimming with the sharks. Landlords often face serious financial harm due to circumstances that may very well be out of their control. This holds especially true for real estate owners that fail to incorporate the proper insurance coverage into their business costs. The good news is that this article explains the various types of insurance policies that you need to protect yourself and your assets in case of an emergency. So without further ado, here are the essential insurance policies that every apartment building owner should have in place.
The Basic Insurance Policies
In order to succeed as a landlord, you need several business related insurance policies that protect you from the common property and liability risks associated with owning real estate. They are as follows….
The Commercial Property Insurance Policy
A commercial property insurance policy protects you against the loss of your apartment building or buildings, as well as other structures on the property including common areas, garages, common areas, storage buildings, and swimming pools to name a few. The amount of coverage and the resulting cost of that coverage are based on a variety of factors such as the age of your roof and mechanical systems, the age of the building, and the location of your building or buildings.
It is also based on the type of building or buildings you own such as high-rise, duplex, or multi family properties. The type of construction, presence of up to date security and fire protection systems, and amenities such as a clubhouse, fitness center, or swimming pool are all decisive factors as well.
The Loss Of Income Insurance Policy
All apartment building owners should also protect themselves with a loss of income insurance policy. It is extremely important coverage that actually reimburses the property owner for lost business, such as rent, if the building is damaged by a covered loss. For example, if there is a fire at the property, and you are not collecting rent on an apartment or multiple apartments until the damage is fixed, the loss of income policy covers that loss of income. As you know, it can take multiple weeks or even months to repair damage, so this policy is a tremendous benefit.
The Landlord Insurance Policy (Commercial General Liability Insurance)
The landlord insurance policy protects real estate owners against claims of actual and alleged property damage or bodily injury to a third party including tenants, visitors, delivery people, and repair people to name a few. In essence, it is the type of coverage that protects you from lawsuits that occur when a tenant or visitor to the property is injured on the premises. It also covers the injured party’s medical expenses. For example, if one of your tenants or a guest falls, slips, or trips while at your property, you are liable. The landlord insurance policy protects you when being sued in a court of law by the third party.
Additional Insurance Policies
It is always a smart business decision to insulate yourself as much as possible. The following insurance policies are not required, however they are an important aspect of protecting yourself and your assets. They are as follows….
The Equipment Breakdown/Boiler And Machinery Insurance Policy
This policy covers damage and loss of income that is caused by a breakdown of covered equipment, including steam boilers and other mechanical systems.
The Commercial Umbrella Insurance Policy
This policy provides excess liability protection for events that exceed the limits of your other liability coverage.
The Errors And Omission Insurance Policy
This policy protects apartment building owners and landlords against claims that they have financially harmed a third party due to errors and or professional negligence.
The Workers Compensation Insurance Policy
This policy protects employees who work at your property or properties if they are injured or suffer from a work related illness. It also protects property owners if the sick or injured employees decide to sue in a court of law.
The Commercial Automobile Insurance Policy
This policy covers any automobiles that are owned by your real estate venture such as maintenance trucks or shuttle vans.
In conclusion, owning real estate, especially apartment buildings, can be a lucrative investment and or career. Keep in mind that something can go wrong at any time. You need to the proper insurance policies in place to protect yourself from financial harm. Otherwise you are putting yourself in a position to fail.
For all your apartment building owners insurance needs, please contact Zawada Insurance Agency. We work to give you comprehensive coverage at a competitive price.
Zawada Insurance Agency, Inc. is a family-owned and operated independent insurance agency, located in Worcester, Massachusetts, serving central Massachusetts and beyond.