Who Needs Commercial Real Estate Insurance
Commercial real estate insurance is important for:
- Landlords and commercial property owners
- Apartment and multifamily property owners
- Commercial real estate investors
- Property management companies
- Mixed-use property owners
- Vacant property owners
- Short-term rental operators
What Real Estate Insurance Can Cover
A commercial real estate insurance program may include:
- Commercial property — building and improvements
- General liability — premises liability for tenants and visitors
- Loss of rents / business income
- Umbrella liability
- Workers compensation for property employees
- Property management E&O
- Flood and earthquake where applicable
- Equipment breakdown
Habitational and Apartment Coverage
Apartment buildings and habitational properties have specific underwriting requirements. Factors such as number of units, tenant type, building age, construction, and location all affect coverage and pricing. Some habitational accounts — particularly older buildings, high-crime areas, or properties with prior losses — may require placement in the E&S market.
Vacant Property Coverage
Vacant buildings present a higher risk than occupied properties. Standard commercial property policies typically reduce or eliminate coverage after a property has been vacant for 60 days. Vacant property insurance is specifically designed for unoccupied buildings and should be reviewed when a property is between tenants or undergoing renovation.
Lessor's Risk
Lessor's risk coverage is designed for property owners who lease space to commercial tenants. It provides liability protection for the landlord when a tenant or visitor is injured on the property. Many commercial leases require the landlord to maintain lessor's risk coverage.
Property Management E&O
Property management companies need professional liability coverage for claims arising from their management activities. This can include claims related to tenant screening, lease administration, maintenance decisions, and financial management of the property. Standard general liability does not cover these professional service claims.
Loss of Rents Coverage
Loss of rents coverage can replace rental income when a covered loss forces tenants to vacate or prevents the property from being rented. This coverage is important for property owners who depend on rental income to cover mortgage payments, taxes, and operating expenses.
Frequently Asked Questions
What is lessor's risk insurance?
Lessor's risk insurance is liability coverage for property owners who lease space to commercial tenants. It protects the landlord from liability claims arising from the leased premises.
Does Vesper write habitational insurance?
Yes. Vesper Insurance Group writes habitational and apartment coverage across multiple states, including accounts that may require E&S market placement.
Does Vesper write real estate insurance in multiple states?
Yes. Vesper Insurance Group writes commercial real estate insurance across multiple states for landlords, investors, and property management companies.
What is the difference between commercial property insurance and real estate insurance?
Commercial property insurance covers the physical building and its contents. Real estate insurance is a broader term that can include property coverage, liability coverage, loss of rents, and other coverages specific to property ownership and management.