Insurance For Apartment Building Owners

Insurance Policies to Consider For Apartment Building Owners

1. General Liability Insurance

This is a critical one. You, as the landlord, are responsible for the upkeep of the apartment's common facilities, which may include specific areas, such as the parking lot, gym, lobby, corridors, etc. The problem is that if someone is injured in one of these common spaces, you may be deemed accountable, and they could file a lawsuit against you.

In order to protect yourself from hefty lawsuits, general liability insurance may be the right choice. General liability insurance can protect you from claims arising from bodily injury or property damage. The policy can cover cost of settlement, legal fees, medical expense, and much more. 

Example

Suppose one of your renters invites a visitor to their home. They're strolling through the lobby when all of a sudden, they trip on an uneven patch of carpet, breaking their wrist. They choose to file a lawsuit against you for the harm they suffered. In this case, general liability insurance may be able to assist you in covering the costs. 

2. Property Insurance 

Another type of insurance to think about is property insurance. You own the building; therefore, it's a significant investment for you. If, due to any unforeseen circumstances, the building sustains damage, property insurance can assist in covering up the cost of repair and replacement. Property insurance is particularly beneficial because there are numerous calamities that could cause harm to the building.
 

You must, however, ensure that you understand which losses are covered under this policy. Damages caused by the following are usually covered: 

• Lightning
• Fire
• Vandalism
• Windstorms
• Explosions
• Riots

In addition, damage to building vehicles is also covered under property insurance. 

3. Business Income Insurance 

You'd be looking at some rather severe financial losses if your renters were forced to move out of their flats due to a substantial loss. You wouldn't be collecting rent because you can't expect anyone to pay rent for a place they can't even occupy. 

Business interruption insurance, also known as business income insurance, can cover the expense of lost income in case business operations suddenly halt. This way, you won't be concerned about losing money while your building is being fixed or renovated. 

Example

Let's suppose that your tenants are unable to stay in the apartment due to an electrical fire. It'll probably take some time to restore your building to its former glory. In this case, business income insurance will be sufficient to compensate you for the lost income while your apartment building is being restored. 

4. Umbrella insurance 

Sure, having general liability insurance is excellent and provides important financial protection. But at some point, you might have to face a claim or a situation that exceeds the limits of your underlying liability coverage. When your liability policy's limit is reached, you may have to pay the remainder of the claim out of your own pockets.
 

This is where umbrella insurance can come in handy. The policy extends your liability coverage beyond the limits of the underlying insurance. Thus, when liability coverage ends, umbrella insurance will help cover the expense. It essentially adds additional liability insurance to your existing policy.

Example 

Suppose that your general liability insurance policy has a $2 million limit. It isn't going to pay you any more than that. But then you are hit with a massive lawsuit worth $3 million. Thankfully, you're covered by a $4 million umbrella policy. Your general liability would cover the first $2 million, whereas umbrella insurance will cover the residual $1 million.

Of course, they aren't the only policies that can keep you safe from harm. You may also want to think about other types of coverages for your apartment building insurance. For example,

• Cyber Liability Insurance
• Crime Insurance
• Employee Dishonesty Insurance
• Equipment Breakdown Insurance
• Errors and Omissions Insurance
• Directors and Officers Insurance

The protection of the property from various catastrophes is the primary concern of apartment building owners. The cost of coverage is determined by the location of the building structure, the type of construction, the age of the building, and several other reasons.

Liability claims and other, less obvious factors like lost income (rent) following substantial damage should all be covered by your apartment complex insurance. A qualified insurance agent can assist you in determining the coverage you require to ensure that you are completely protected.

The following are just a handful of the dangers that apartment building owners have to contend with:

• Property damage from fires, hurricanes, and other natural disasters
• Liability for injuries to tenants, employees, and visitors
• Theft or vandalism
• Invasion of privacy, resulting in a loss of rental revenue
• Liability for advertising
• Disgruntled tenants or employees
• Employees are accused of committing fraud, deception, and other malicious activities.

Keep in mind that any apartment building insurance you buy will come with a deductible if you ever need to use your right to file a claim. Prior to purchasing, this deduction should be carefully evaluated. If you own a complex with many buildings, you should consider whether the deductible should be applied to each event or to each building.

Consider this: if you own many buildings that are damaged during a storm and require roof repair, your deductible will be determined by either the occurrence itself or a per-building deductible. You are responsible for the deductible amount before your coverage kicks in if you choose the per-building deductible. If you get a per-occurrence policy, you will only have to pay a single deductible, regardless of how many buildings are damaged.

Landlord insurance, also known as commercial general liability insurance, protects landlords from claims of alleged or actual property damage, as well as claims of third-party physical injury caused by delivery workers, maintenance personnel, guests, or renters. This can shield your company from litigation stemming from injuries such as slips and falls, tripping, or injuries received on the premises. All of these dangers can be mitigated with a few insurance products tailored to your specific needs.