Real Estate And Rental Property Insurance FAQ

• At the minimum, real estate and rental property businesses need general liability and commercial property insurance.
• If they have employees they will need workers compensation in most states.
• If they have vehicles registered to the business, or use vehicles for the business purposes, they will also need commercial auto.
• There are also other specialty coverages and endorsements that might be needed based on their operations.

Package policies are the most convenient and cost effective way to combine a number of coverages in one policy, for both the insured and the insurance carrier. Some classes of real estate property may be eligible for coverage in both the businessowners program and the commercial package policy.

Types Of Real Estate And Rental Property Package Policies:

• Businessowners Policy (BOP)
• Commercial Package Policy (CPP)

Real estate owners must protect the building because it is their major asset. Their primary concern is the structure itself because they usually have no control over the activities inside unless those activities violate a contract.

Time element coverages, especially business income that includes rental value, are necessary for continued cash flow following a loss.

Types Of Property Coverages:

• Building
• Business Personal Property
• Personal Property of Others
• Improvements and Betterments

Most inland marine forms and coverages for these classes of business are limited and typically apply to exposures found in offices or to coverage for buildings under construction. Deeds and contracts are extremely valuable papers and should be covered with the appropriate form.

Types Of Inland Marine Coverages:

• Accounts Receivable Coverage
• Builders Risk Coverage
• Contractors Equipment
• Difference in Conditions (DIC) Coverage
• Electronic Data Processing Equipment Coverage
• Fine Arts Coverage
• Goods In Transit
• Signs Coverage
• Valuable Papers and Records Coverage

Recommended crime coverages include protection against loss of money if tenants pay their rent in the form of cash or check at the rental office. Larger operations are subject to forgery or computer fraud exposures. Regardless of size, all operations are exposed to potential employee theft problems.

Types Of Crime Coverages:

• Computer and Funds Transfer Fraud Coverage
• Employee Theft Coverage
• Forgery or Alteration Coverage
• Inside The Premises-Theft of Money and Securities Coverage
• Inside The Premises-Robbery or Safe Burglary of Other Property Coverage
• Money Orders and Counterfeit Money Coverage
• Outside The Premises Coverage

Real estate and rental property operations may be required to post bonds based on their activities, operations and the licenses and permits needed to do business.

Types Of Surety Coverages:

• Court Bonds
• Fiduciary Bonds
• License and Permit Bonds
• Miscellaneous Surety Bonds
• Notary Public Bonds

Real estate and rental property operations typically have no products or completed operations liability exposures. However, they do have substantial premises liability issues and concerns. The nature of the building occupancy and the contractual relationship between the owner and tenant determines the actual exposures.

Types Of Liability Coverages:

• Commercial General Liability (CGL) Coverage
• Employee Benefits Liability Coverage
• Employment-Related Practices Coverage
• Special Events Liability Coverage

The commercial automobile exposure is usually very limited and consists mainly of private passenger automobiles and light service trucks. Parking operations may have significant garagekeepers exposure for customers' vehicles.

Types Of Business Auto Coverages:

• Auto Medical Payments
• Business Auto Coverage
• Collision Coverage
• Comprehensive Coverage
• Garagekeepers Coverage
• Hired & Non-owned Auto Coverage (HNOA)
• Uninsured/Underinsured Motorists Coverage

Some of these operations have no employees at all while others have large payrolls. It depends on the number of owned properties and maintenance agreements. A worker is considered an employee even if his or her remuneration is in the form of barter, such as a "free" apartment, instead of in actual money.

Types Of Workers Comp Coverages:

• Stop-Gap or Employers Liability Coverage
• Voluntary Compensation
• Workers Compensation and Employers Liability Coverage

Even with risks or operations not having significant premises liability exposures, the additional limits of insurance available through an umbrella or excess policy are important and needed to protect the financial assets of the property owner.

Types Of Excess Liability Coverages:

• Excess Liability Coverage
• Umbrella Coverage

The following coverages could be vital for larger real estate operations but unnecessary for smaller operations. Of particular interest for older habitational buildings could be the lead contamination coverage. Larger operations may use drones to review current real estate or to investigate new opportunities.

Types Of Specialty Coverages:

• Business Legal Expense Coverage
• Cyber Liability Coverage
• Data Security Breach Coverage
• Directors and Officers Liability Coverage
• Environmental Impairment Liability Coverage
• Fiduciary Liability (Pension, Welfare and Employee Benefit Funds) Coverage
• Identity Theft Insurance Coverage
• Lead Paint Contamination Coverage
• Recreational Trail Liability Coverage
• Risk Retention Group Liability Coverage
• Solar Energy System Coverage
• Tax Liability Coverage
• Tender Offer Defense Expenses Coverage
• Terrorism Insurance Coverage
• Title Insurance Coverage
• Underground Storage Tank (UST) Liability Coverage
• Unmanned Aerial Vehicles (UAV) (Drones)