Landlord Insurance Services Snapshot
What are you doing to manage liabilities associated with property ownership?
From vacant property to attractive nuisances to HOA foreclosures, we’ll help you identify and mitigate your potential liabilities, so you can focus on managing your real estate investments instead of worrying about the threat of a potential lawsuit.
Below is a very broad Coverage Evaluation Checklist, which can be used as an excellent starting point to determine if you’re buying the right coverage. This ensure we address every possible exposure with you. Feel free to download and save it for your own use or complete with our agency’s team.
As a landlord and real estate investor, your exposures are unique to the nature of the work you do. The below categories are the most critical areas of risk that most of our real estate clients needed to address through proper insurance placement, as well as risk management strategies.
TENANT LEGAL LIABILITY
One of the most common causes of property damage is from your tenants. You can purchase an insurance policy that protects against tenant-caused damage and charge them for the premiums (in lieu of the “renters insurance” requirement). The advantage is this policy is in your control and pays the loss to you (there is also coverage available for your tenants’ contents). Additionally, it may allow us to secure more credits or better pricing on your Commercial Property insurance.
FIRE, LIGHTING, WIND & THEFT
These are the most common causes of property loss for real estate landlords. It’s important to evaluation the different levels of Commercial Property Insurance available to you and the costs associated. You may want more basic or more broad coverage depending on your cash flow and risk tolerance.
Failure to insure your property to adequate value, may result in coinsurance penalties which can hurt you during a claim by leaving you with much lower payments than anticipated or needed to repair the damage. It’s important to work with your agent to determine the correct values for your property.
ORDINANCE OR LAW
Following a loss, your local ordinances may require you to comply with updated building codes in your community. The increased costs associated with this compliance may not be covered by your Commercial Property insurance unless you specifically purchase Ordinance or Law coverage.
If your property experiences a loss (e.g. fire or wind), then you may lose rental income for a period of time. Business Interruption insurance can protect you against this loss of income.
PREMISES & ONGOING OPERATIONS
Included in Commercial General Liability insurance policies, this coverage is extremely important for any type of business with that involve a lot of onsite “foot traffic”. If one of your tenants or visitors is injured on the premises (i.e. the infamous “slip and fall”), then you’ll want insurance to provide coverage for defense, settlement and judgments from the alleged bodily injury.
PRODUCTS & COMPLETED OPERATIONS
Included in Commercial General Liability insurance policies, this coverage is extremely important for any landlord. If “your work” (or your contractor’s work) results in bodily injury or property damage to a third party, then you could be held liable and this coverage would provide coverage for defense, settlement and judgments. Landlords are frequently updating or repairing their properties and if your contractor makes mistakes that cause harm to your tenants or visitors, that liability could draw you in as well.
If you are doing significant repair or new construction, then a broad Builders Risk policy may not only provide the best type of protection, but in some cases may also be more cost effective than Commercial Property insurance.
In most states, businesses are required to abide by state workers compensation laws, which obligates the employer to pay for any medical expenses and lost wages related to work-related injuries or illnesses. Workers Compensation insurance is required to ensure the financial resources are available to meet this obligation.
Implementing good safety and training practices into your real estate business will help prevent work comp claims and keep your costs low – we have resources and expertise which can be shared with you, if you have employees.
Often, you may have employed maintenance workers or property managers who drive their own autos while doing work on your behalf. You or your legal entities could be exposed to risks if they are in an auto accident and harm a third party. Purchasing Non-Owned auto insurance is a great solution to this exposure and is very cost-effective.
In real estate, your property may create environmental exposures:
- Accidental (or intentional) removal of hazardous materials
- Discharge pollutants from your properties
General Liability and Business Auto policies restrict or sometimes totally exclude liability from pollution. If you have a serious enough exposure, you may want to purchase Site Pollution Liability. Discuss with your agent if you are concerned about this risk.
If your HVACs or other type of onsite equipment have mechanical failures, explosions or electrical arcing, this may not be covered by your Commercial Property insurance unless you purchase this separate coverage (also referred to as “Boiler & Machinery” insurance).
If you or your property manager retains personally identifiable information (PII), including information on tenant financial accounts, social security #s, birthdays, driver license #s, etc., and your records are breached by outside parties, then you may face significant liability. Buying a robust Cyber Insurance policy can help protect against these ever-growing and evolving exposures.
Many of your utilities providers offer you the option to either acquire a Surety Bond or place a large deposit to initiate service. If your cash flow strategy does not include the deposit, then our agency can provide the required Surety to get you started with quick turnaround.
- “A Rated” Insurance Carriers
- Property – covers loss to buildings, personal property and loss of income from causes such as fire, lighting, wind, theft, etc.
- General Liability – covers liability arising from personal or advertising injury or bodily injury or property damage occurring on your premises or from your work, products or ongoing operations
- Errors & Omissions Liability – covers liability arising from a professional error or omission arising from work as a realtor, landlord or property manager
- Business Auto – covers physical damage to your owned, rented or non-owned vehicles, as well as liability arising from bodily injury or property damage to others
- Employment Practices Liability – covers liability arising from employment issues like discrimination, harassment, retaliation or wrongful termination
- Directors & Officers Liability – covers liability to director and officers of your company resulting from fiscal mismanagement, breach of duty, etc.
- Fiduciary Liability – covers liability to “fiduciaries” on behalf of beneficiaries of employee benefits, health/welfare plans and retirement plans
- Crime – covers losses resulting from employee dishonesty, funds transfer fraud, robbery or theft and forgery or alteration
- Cyber Liability – covers liability and expenses arising from data breaches
- Workers Compensation – covers your obligations to work-related injuries under workers comp statute, as applies in your state
- Tenant Legal Liability – covers you for damage caused by tenant negligence to your property
- Coverage Enhancement Options (theses are often excluded from coverage unless added by endorsement):
- Ordinance or Law – covers your property for increased costs of construction to comply with updated building codes after a covered loss
- Equipment Breakdown – covers equipment like generators, hvac systems, phone systems, computers, machinery and boilers from mechanical breakdown, explosion or electrical arcing
- Flood – covers your property from flood damage
- Earthquake – covers your property from earth movements
- Punitive Damages – covers loss resulting from judgments which impose multiplication of the general damages as a punishment to the defendant (note: punitive damages insurability by state)
- Mental Anguish – ensures coverage for bodily injury applies to mental anguish, which in some jurisdictions has been classified as such, but in others it’s not so clear
- Wage & Hour – coverage for employment practices liability resulting from disputes over salary vs hourly workers (i.e. exempt vs non-exempt employees)
Shields Insurance Agency is an Independent Insurance Agency based out of Birmingham, AL and we are licensed to write property & casualty insurance in AL, FL, GA, MS and LA. This includes commercial lines and personal lines insurance.
Representing several top-rated insurers, we are capable of writing commercial insurance policies for an array of business types with very competitive pricing and broad coverage terms.
Some of our primary specialties – industries for which we are most competitive – include:
Lets Reduce Your Rates and Improve Coverage
Most people don’t understand their unique risks or their insurance and are therefore buying the wrong coverage and paying too much. If you work with our insurance agency, we will implement our simple 3-step process to identify your key exposures, improve insurance coverage and reduce rates.