What Is Apartment Building Owners Insurance?
Apartment owners can be classified as business owners who manage and ensure the smooth functioning of the property rental operations of their building or complex. You are responsible for providing a safe environment for your tenants both while in the apartment and the surrounding area. Apartment building owners will be faced with several property and liability risks daily. It is imperative to secure protection from catastrophic events, liability claims and lost income.
Apartment Building Owners Insurance is a customizable program of the following coverage:
- Business Owners Policy (BOP)
- Property Insurance
- Loss of Rents& Extra Expense
- Umbrella Insurance
- Workers Compensation
The BOP policy includes basic coverage for property, income loss, and general liability but can also include other coverage such as Crime, Employee Dishonesty, Advertising & Personal Injury Liability, and Inland Marine.
Apartment building owners will need insurance not only from unforeseen events such as wildfire or hurricane catastrophes damage and the ensuing loss of revenue but also for third party liability claims such slip and falls in common areas. Our agent will examine your operations and building characteristics to determine the risks and recommend the suitable policies specific to your situation.
These are the primary risks you might face as an apartment building owner.
- Catastrophic Damage to Property
- Injuries to Tenant, Employee or Visitor
- Loss of Rental Income
- Theft and Vandalism
- Equipment Breakdown
- Personal Injury Liability
- Discrimination Lawsuits
- Employee Injuries
- Scenario 1 - A prospective tenant steps on a live wire while taking a tour of the building undergoing renovation.
- Scenario 2 - A tenant sues you for wrongful eviction as a result of your employee misplacing their rent check.
- Scenario 3 - A wildfire destroys the entire structure of one of your buildings while the tenant’s relocation will not be paying you to rent for the next 6 months.
- Scenario 4 - Your guarded entry gate is broken and while the guard is away from his post an unsavory person enters the complex and attacks a woman leaving her car to go into her apartment.
- Scenario 5 - Your employee making repairs to the community pool’s mechanical equipment is electrocuted and badly injured. Your worker's compensation policy will pay medical expenses as well as a percentage of lost wages to your injured staff member.
Business Owner’s Policy (BOP) or Package Policy
A BOP or package policy encompasses general liability including personal injury, property, and business income insurance. Coverage will be provided for bodily injury, or property damage liability, as well as a personal injury resulting from libel, vandalism, slander, wrongful eviction, and invasion of privacy. The property coverage in the BOP includes coverage for physical damage to property and equipment from a covered peril and the ensuing lost rental income resulting from damage to your premises. Whether you are eligible for a BOP or a Commercial Package Policy, both of these are easily customizable to give you the holistic coverage desired.
Workers' compensation is typically required in most states, depending on various characteristics of a business such as the number of employees or the type of legal entity your business is filed in the state. Even in the absence of a worker’s compensation policy, the employer will be held liable for all employee injuries occurring on the job.
Umbrella Liability Insurance
Umbrella Liability Insurance provides an extra layer of protection over and above limits on your general liability, auto, or employers liability insurance. This type of insurance is the best for those apartment owners with a large number of tenants, swimming pools, exercise centers, clubhouses, and active community events. It provides that extra “cushion” in the event, your underlying policy limits are exhausted.
Utility surety bonds can be used in place of cash for the deposit amounts typically required by electric, water, and communications provider for new apartment building owners
Equipment Breakdown Policy
It May be possible to include in your BOP or Package but a standalone policy is also a great option. For a sudden and accidental breakdown of mechanical equipment that can render a building uninhabitable (the temperature outside is -20 degrees Fahrenheit) when the boiler system providing heat explodes. Not only will this policy pay for the repair of the boiler but also for the damage caused to the building from the explosion since this peril would be excluded from a standard property policy.
State Licensing And Liability Coverage
Check with your state, county, and city municipalities to find out details of potential licensing and insurance required to operate apartment buildings or rented condos or dwellings in your community.
The costs of coverage we offer depend on various factors ranging from the age of the edifice to the layout of the building structure.
Landlords of individual properties, Apartment building owners and even vacation home rental owners will benefit from this type of insurance program.