As anyone can probably guess, owning a residential rental property can be both personally and financially rewarding. But it can also be just as risky as Rock Climbing, especially if you’re new to the game. And without the right apartment building owner’s insurance, landlords can face serious financial harm if something goes wrong. Some perils are more obvious like slip and falls and water pipe breaks but some are not so obvious such as injuries to contractors working on your building. It may be your problem even if your tenant hired the contractor?
But that’s why we’re here. To help walk you through the coverages you need to properly protect yourself. And when you’re ready, LPL Risk Management can help take it from there. We will shop multiple companies, bring you more options than anyone else, and make sure you get the price and coverage you’re looking for. So, let’s get started.
Basic Coverage for Apartment Building Owners
To make it in the landlording world, apartment building owners need several business insurance policies to protect them from all-too-common property and liability risks. The most common coverages are commercial property ad commercial liability, however, your unique situation may benefit from a few other types.
Commercial property coverage protects against the loss of your apartment building or buildings within a complex, as well as other structures on the property, like: garages, office space, common areas, fences, swimming pools, and storage buildings. Your apartment building property insurance should also cover any additions or improvements that are completed or under construction, as well as any business personal property that is kept on the premises and used to maintain or service the building and grounds. The amount of coverage you need and the cost of coverage depend on a variety of factors including the following:
- The age of your roof and mechanical systems
- The age of the building
- The location of your building or complex
- The type of building (e.g., high-rise, duplex, multifamily, etc.)
- The type of construction
- The presence of a swimming pool, fitness center or clubhouse
- The presence of up-to-date security and fire protection systems
Remember that your property insurance coverage is subject to a deductible if you have to file a claim. If you own a large complex with multiple buildings, does your deductible apply per building, or per occurrence?
Imagine that several buildings in your complex fall victim to hail damage and need roof repairs. A per-building deductible requires that you pay the deductible for each building that needs repairs before your coverage pays for the damage. A per-occurrence deductible, on the other hand, requires you to pay one deductible regardless of the number of buildings that sustain damage.
This two options are important for you to understand to help you choose wisely when purchasing your coverage. Your agent can help walk you through any questions you have on the pros and cons to both, too, so don’t be scared you’ll make the wrong call.
Apartment building owners also need loss of income coverage. This important coverage reimburses you for lost business income(rent) if the property is damaged by a covered loss (storm, fire) and results in a loss of income or suspension of operations while repairs are made to the property. And that’s huge, because missing out on some, or all, of that income can put a significant dent in your operation.
Commercial General Liability Insurance, or Landlord Insurance, protects against claims of actual or alleged property damage or bodily injury by third parties (tenants, visitors, repair persons, delivery persons, etc.). This is the type of coverage you need to protect you from lawsuits if a tenant or visitor is injured at the property’s pool or gym, or suffers a minor event like a slip, trip, or fall on the premises.
For help with your insurance plan and management of risk, contact LPL Risk Management at 631-676-7020
