Manufacturing And Mercantile Rental Property Insurance South Dakota

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Manufacturing And Mercantile Rental Property Insurance South Dakota Policy Information

SD Manufacturing And Mercantile Rental Property Insurance

Manufacturing And Mercantile Rental Property Insurance South Dakota. Manufacturing or mercantile rental properties lease space to various tenants, including manufacturers, restaurants, retail, and service establishments. The leases can be offered on a short-term basis or extend through a number of years.

Being the owner of a manufacturing or mercantile rental property can be quite lucrative; however, there are risks that are associated with this type of business operation. While you do your best to ensure you are renting to the best possible tenants and you go out of your way to make sure that you deliver exceptional conditions, unforeseen problems can rise that are out of your hands. When something does go wrong, you are responsible for the monetary costs that are associated with any damages or repairs that may occur.

Investing in the right type of insurance coverage is the best way to protect yourself from monetary losses that are associated with various issues that could arise. To learn more about manufacturing and mercantile rental property insurance South Dakota, keep on reading.

Manufacturing and mercantile rental property insurance South Dakota protects your commercial real estate from lawsuits with rates as low as $87/mo. Get a fast quote and your certificate of insurance now.

Why Is Manufacturing And Mercantile Rental Property Insurance Important?

There are a slew of issues that could arise with your rental property. A fire could occur. A client could file a lawsuit against you, claiming that you knew about a leaking pipe and didn't correct it, and that pipe ended up causing a flood that damaged their inventory or equipment. Your building could be damaged in an act of vandalism. These above-described scenarios are just some of the problems that could arise.

As the owner of the commercial real estate, you would be legally responsible for any necessary repairs, as well as any injuries that may occur on your property. Additionally, should a tenant or a third-party visiting the property file a lawsuit against you for any personal injuries or damaged property, you would also have to cover the cost of your legal defense fees and any settlements that a court may award a plaintiff.

Commercial property insurance is essential because it protects you from the financial burden of the above-mentioned situations. If something does go wrong, instead of having to pay for the associated expenses yourself, the company that issues you manufacturing and mercantile rental property insurance South Dakota policy would cover them for you. In other words, insurance helps you avoid financial devastation. Additionally, many types of insurance coverage are mandated, meaning that you are legally required to carry certain policies. If you aren't properly covered, you could end up facing stiff penalties.

What Type Of Manufacturing And Mercantile Rental Property Insurance Do You Need?

There are several types of manufacturing and mercantile rental property insurance South Dakota coverage that commercial real estate owners should carry, including:

  • Commercial Property - First and foremost, you'll need to invest in commercial property insurance. This type of coverage protects the building itself and the contents that are housed within it from damages that are associated with acts of nature, vandalism, and theft. For example, if a fire erupts or a pipe bursts, commercial property insurance would cover the cost of any necessary repairs. It would also pay for anything within the building that's damaged, such as furnishings, inventory, supplies, and equipment.
  • Commercial General Liability - You will also be required to carry commercial general liability insurance. This type of policy protects you against third-party injury and property damage. For instance, if potential renter sustains an injury while touring your property, this policy will pay for any damages or medical bills. Additionally, your insurance carrier will assist with any legal defense and settlement fees, should a third-party file a lawsuit against you.
  • Business Interruption Insurance - You should also consider investing in business interruption insurance. Should your property be damaged in a fire, if mold growth occurs, or if anything else happens that necessitates the closure of the facility, you could lose a substantial amount of income. Business interruption insurance will pay for any income that you would lose while operations are suspended.

These are just some examples of the policies you'll want to invest in as an SD manufacturing or mercantile property owner. Depending on the specifics of your operation, additional types of coverage may be needed.

How Much Does SD Manufacturing And Mercantile Rental Property Insurance Cost?

The cost of insurance will depend on a variety of factors. Where in South Dakota your property is located, the type of clients you rent to, the size of your rental property, and the overall value of the property are just some of the factors that will affect the cost.

SD Manufacturing And Mercantile Rental Properties Risks & Exposures

Property exposures depend on the type of tenant operation. A complete list of tenants is necessary to accurately determine exposures. The building owner must be aware of the wiring, heating, and plumbing needs of the tenant and supply them according to code. Additional circuit breakers and special conduit may be needed. Each unit may have a separate heating system, or there may be a boiler to provide heat to all units. All systems must be properly maintained on an ongoing basis. Conversions and upgrades must follow building codes and appropriate permits must be obtained for such work.

Special exposures can include such operations as cooking, painting, welding, and refueling of vehicles or warehouse equipment. While some tenant turnover is expected, a high percentage of vacancies can indicate a financial problem. Other property concerns are the age, condition, and repair of the building, the size, and configuration of the building including the roof expansion, and the condition and structure of the roof. Business income could be high as tenants may be unable to access the building and backup facilities may not be available.

Crime exposure is from employee dishonesty and money and securities. Background checks should be conducted on all employees. Receipts must be used at all times, and reconciliation between receipts and money received. Ordering and disbursements must be handled by separate individuals. Access to units must be limited to those authorized to do so, and access to master keys must be strictly controlled. Units should be rekeyed when there is a change in tenant.

Inland marine exposure is from accounts receivables for rents due, computers, and valuable papers and records for leases, mortgages, and tenants' information. Duplicates of all data should be kept at a separate location for easy replication. Contractors' equipment will be needed if the applicant is responsible for maintenance. Signs may be subject to wind, vehicle damage and collapse from the weight of ice and snow.

Premises liability exposure is dependent on the lease agreement and the number of visitors to the property. The landlord is usually responsible for maintaining the building, parking lots, sidewalks, and other exterior areas, but can transfer these responsibilities to the tenant by contract. Tenants are normally responsible for the condition of the area that they control. To prevent slips, trips, and falls, all premises must be well maintained with aisle ways free of debris, flooring in good condition, no frayed or worn spots on carpet, and no cracks or holes in flooring. The number of exits must be sufficient and well marked, with backup lighting in case of power failure. Steps should have handrails, be well-lighted, marked, and in good repair.

Parking lots and sidewalks need to be in good repair, with snow and ice removed, and generally level and free of exposure to slip and fall. Security of visitors in parking areas is a responsibility of the owner or operator of the premises. Personal injury losses may occur due to alleged false arrest, wrongful eviction, invasion of privacy, or discrimination. Clear guidelines for tenant acceptability are important. Contractual relationships should be reviewed, and certificates of insurance obtained from tenants, vendors, and subcontractors. Additional insured status should be considered. If security personnel are employed, procedures must be established as to appropriate response to their assigned duties. Additional exposure is presented if the security personnel carry firearms.

Business auto exposure is generally limited to hired and non-owned for employees running errands. If there are owned vehicles, such as those used for servicing or security patrols provided by the building owner, any driver must have a valid license and acceptable MVR. Routine maintenance on owned vehicles should be documented.

Workers compensation exposure hazards usually are service, janitorial-, or maintenance-related. Back pain, hernias, sprains, and strains from lifting or working from awkward positions are common. Skin and lung irritation can result from working with cleaning chemicals and paint. If security officers are employed, they should be well trained for the duties assigned and appropriately supervised. If firearms are carried, the employee must meet all licensing and training requirements.

SD Manufacturing And Mercantile Rental Property Insurance - The Bottom Line

To find out more about the type of manufacturing and mercantile rental property insurance South Dakota you should carry, how much coverage you need, contact an experienced commercial insurance broker.

South Dakota Economic Data, Regulations And Limits On Commercial Insurance

Made In South Dakota

When thinking about opening a business, there are a lot of factors that need to be taken into consideration. Of these factors, location is one of the most crucial. In order for your business to thrive, the area where you set up shop must offer a favorable economy and a market that will benefit from the products and/or services you provide.

Assessing the unemployment rate and the top industries that are thriving in a particular state can help you determine if a particular location will be beneficial for your venture. Additionally, it's important to have an understanding of the types of commercial insurance policies you'll need to carry to protect yourself and others you interact with, as well as to ensure you are complaint with the law.

If you're thinking about starting a business in South Dakota, read on for an overview of the economic trends and commercial insurance requirements in the Mount Rushmore State.

Economic Trends For Business Owners In South Dakota

According to the Bureau of Labor Statistics, the unemployment rate in South Dakota was 3.2% in December of 2019. While this is marginally higher than the 2.9% of July, 2019, it is still .03% lower than the national average, which was 3.5% in the last month of the year.

The low unemployment rate indicates that the state offers healthy conditions for prospective business owners who are considering establishing a company in the Mount Rushmore State.

There are several areas within the state that are seeing a spike in business development, including large metropolitan areas, as well as some smaller cities and suburban regions. The best places to open a business in South Dakota include:

  • Aberdeen
  • Brookings
  • Mitchell
  • Pierre
  • Rapid City
  • Sioux Falls
  • Sturgis
  • Watertown

Compared to the large, open expanses that South Dakota is famous for, the above-mentioned areas are easily accessible and more densely populated; hence why they're ideal for business endeavors.

There are several industries that are seeing significant gains in SD. Some of the largest industries include:

  • Agriculture, fishing, and forestry
  • Casino gaming
  • Energy
  • Hospitality and tourism
  • Logistics
  • Manufacturing
  • Mining
  • Services and labor
  • Transportation
Commercial Insurance Requirements In South Dakota

The South Dakota Division of Insurance regulates insurance in SD. South Dakota mandates very few forms of insurance coverage by law. They enforce worker's compensation.

South Dakota requires you to have worker's compensation insurance if you hire even one employee on a regular basis. This includes part-time employees, family members, minors, and immigrant employees. It is not required for independent contractors or domestic employees, though you should check to make sure any contractors you have are true contractors, and not employees.

South Dakota also requires all business-owned vehicles to be covered by commercial auto insurance. Other types of business insurance that business owners should carry depend on the specific industry.

Additional Resources For Commercial Property Insurance

Read up on small business commercial property insurance, including how business property insurance protects your company's building's and/or their contents from damage, destruction, theft and vandalism.


Commercial Real Estate Insurance

Rental property owners, real estate developers and property managers should keep an accurate survey of each property they own or that is in their care. This survey should include inventories of furnishings and equipment at those properties. These documents establish the extent of their insurable interest, facilitate the arrangement and placement of insurance and minimize controversy and confusion if a loss occurs.

Insurance coverage on property, general liability and professional or errors and omissions liability should be arranged and placed for every real estate and rental property risk.

The main goal of any commercial property insurance program is to protect the insured's real and business personal property. Buildings and their contents property usually represents a significant portion of its total assets, regardless of the size of the business. A commercial property program can provide the coverage you need if a loss should occur.

The ISO Commercial Property Building and Personal Property Coverage Form is an insurance industry standard that provides this needed coverage. As a result, it should always be reviewed and used as a benchmark for comparison when evaluating any commercial property coverage form.

This policy treats business personal property as more than just the contents of a building. When there is a limit of insurance on the declarations, property can be covered if inside the building or structure or within 100 feet of the building or premises and either in the open, or even in or on a vehicle.

There are many endorsements available to tailor the ISO Commercial Property Coverage Forms. Some are mandatory for all policies while others are mandatory for specific classifications and types of business. Others are optional and permit a standard form to be customized to meet a specific risk's coverage needs. Endorsements broaden, restrict, delete, modify, or add coverage.

These policies can provide the following additional coverages for small specific limits of insurance: debris removal, preservation of property, fire department service charge, pollutant clean up and removal, increased cost of construction and electronic data.

Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Signs, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.

Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Contractors' Equipment, Fine Arts, Cyber Liability, Employment-related Practices, Automobile Liability and Physical Damage, and Stop Gap Liability.


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Also learn about South Dakota small business insurance requirements for general liability, business property, commercial auto & workers compensation including SD business insurance costs. Call us (605) 205-5099.

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