Apartment Building Insurance Policy Information
Apartment Building Insurance. There are definite perks to owning rental property, since the role of landlord can be rewarding from both a financial and personal standpoint. However, landlords take on a lot of risk, which makes owning apartment building insurance an essential part of being in this niche. If you do not have the right type and level of apartment building insurance in place, you put yourself at risk of unnecessary financial problems if anything should go awry.
Apartments are residential structures built to provide living accommodations for multiple individuals or families through a rental agreement called a lease. Apartment buildings can be one story or multi-story, include two through dozens of living units, and may provide services such as clubhouse facilities, fitness center, laundry, parking garages, playgrounds, and swimming pools.
Apartment building insurance protects your property from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked apartment building insurance questions:
- What Is Apartment Building Insurance?
- How Much Does Apartment Building Insurance Cost?
- Why Do Apartment Buildings Need Insurance?
- What Type Of Insurance Do Apartment Buildings Need?
- How Can Apartment Building Owners Reduce The Risk For Liability Claims?
- What Are Apartment Building Operators Risks & Exposures?
- What Does Apartment Building Insurance Cover & Pay For?
What Is Apartment Building Insurance?
Apartment building insurance is a type of insurance that covers the physical structure of an apartment building and its common areas, such as the lobby, hallways, and elevators.
It typically includes protection against damage from natural disasters, such as fires and storms, as well as liability coverage for injuries that occur on the property. The insurance may also cover loss of rental income if the building becomes uninhabitable due to damage.
Landlords typically purchase this type of insurance to protect their investment and to provide financial security in the event of unexpected events.
How Much Does Apartment Building Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small apartment buildings ranges from $67 to $89 per month based on location, number of units, payroll, sales and experience.
Why Do Apartment Buildings Need Insurance?
Apartment buildings need insurance for a variety of reasons. First and foremost, insurance helps protect the building and its owners against potential financial losses due to unforeseen events such as natural disasters, fires, and accidents. This can be especially important for apartment buildings, as the potential for damage to the building and its contents is often greater due to the close proximity of multiple units.
Additionally, apartment buildings often have common areas such as lobbies, gyms, and pools that may be used by residents and visitors alike. These areas can be prone to accidents and injuries, which could lead to costly lawsuits. Insurance can help cover the costs of legal fees and damages in the event of a lawsuit.
Apartment buildings also often have multiple tenants who may bring their own personal belongings and furnishings into the unit. These items can be lost or damaged due to events such as fires or burglaries, and insurance can help cover the costs of replacing these items.
Overall, insurance is an essential component of owning and managing an apartment building. It helps protect against financial losses and provides peace of mind for the building's owners and residents.
What Type Of Insurance Do Apartment Buildings Need?
The biggest concern for any property owner is protecting the property from catastrophic occurrences. While property insurance can be a bit complicated to understand, working with an agent is a good way to discover the nuances of the niche and find out how much insurance you really need for your business.
The specific answer to your coverage needs depends on a variety of factors, including where your business is located, the type of construction being insured, and other variables.
In addition, your apartment building insurance should also protect you from any liability claims that may arise against you, including lawsuits, and provide coverage for lost rent income that you may experience following a loss covered by your insurance. An experienced agent can help you determine the amount of coverage required for full protection of your business. Some risks you face include:
- Storms, fires, and other types of catastrophic damage to your property
- Injuries to visitors, employees, and tenants
- Vandalism and theft
- Loss from libel and slander
- Advertising liability claims
- Loss of income from rentals
- Lawsuits arising from disgruntled employees and tenants
- Fraud allegations
- Intentional litigious acts by your employees
- Claims of misrepresentation
You can address these risks with a few types of apartment building insurance that your agent can tailor to your specific requirements, based on your business model and other factors.
Apartment Building Owners' Coverage
Several types of insurance can be essential for apartment building owners. As an owner of a rental property, you must protect yourself from liability and property risks.
You should protect your commercial property from loss, including loss from apartment buildings and complex buildings such as office space, garages, fences, common areas, storage buildings, and swimming pools. Your apartment building insurance should also cover any types of improvements, such as additions, or any structure that is currently being constructed or erected on your property. In addition, buy sufficient coverage to protect the personal property that is located on your business' premises, including items used for service or maintenance of grounds and buildings. The coverage amounts you choose depend on:
- Your mechanical and roof systems and how old they are
- The building's age
- The building's location
- Whether the building is a duplex, high-rise, or multifamily building
- The construction type
- Whether there is a clubhouse, fitness center, or swimming pool on the property
- Whether or not the building has a fire and security system
Keep in mind that any apartment building insurance you purchase will be subject to a specific deductible should you need to exercise your right to file a claim. This deductible should be carefully considered prior to purchase. You should ask yourself if the deductible should apply to each occurrence or to each building if you own a complex with multiple buildings. This is an important decision when buying coverage.
Consider for a moment that if you own several buildings that become damaged during a storm and you need roof repair, the deductible amount that you pay will be based either on the occurrence itself or on a per-building deductible. If you choose the per-building deductible, then you are responsible for the deductible amount before your coverage kicks in. If you buy a per-occurrence plan, then you will pay just a single deductible, no matter how many buildings become damaged. You should also consider loss-of-income coverage. This type of coverage provides reimbursement for any lost rent income that you experience due to damage or loss that results from a covered peril.
Landlord insurance, or commercial general liability protection, provides a buffer against claims of alleged or actual damage to property or any third-party bodily injury claims brought on by delivery personnel, repair personnel, visitors, or tenants. This can protect your business from any lawsuits resulting from sustained injuries ranging from slips and falls to tripping or injuries on the grounds. Some other possible insurance coverage types to consider include:
- Equipment/machinery coverage. This coverage protects you from the loss of income or damage resulting from covered equipment breakdown. For example, your steam boiler or your mechanical system breaks down.
- Commercial umbrella policy. This coverage provides excess liability protection for any events that occur that are in excess of the liability coverage you own.
- BOP policy. A business owner's policy provides a bundle of coverage for commercial property, business interruptions, and commercial liability all in one.
- Worker's comp. This policy covers employees working on your premises from any work-related injury or illness.
- Commercial auto coverage. Any vehicles owned and operated by your business must be covered under commercial auto coverage.
How Can Apartment Building Owners Reduce The Risk For Liability Claims?
When operating an apartment complex or building, you may find yourself on the receiving end of lawsuits and liabilities. Apartment building coverage can mitigate the financial loss you experience, but there are ways to lower your chance of being subjected to claims to start with. Avoid claims by:
- Owning an appropriate amount of coverage.
- Keeping your property in good shape.
- Eliminating any environmental hazards in the apartments you rent.
- Keeping security a top priority.
- Avoiding discrimination when renting out units.
- Respecting tenant privacy.
- Letting tenants know of any potential dangers.
What Are Apartment Building Operators Risks & Exposures
Property exposures are related directly to the number of apartment units. Ignition sources are from the electrical wiring, heating, air conditioning, and cooking systems. Older buildings should have wiring, heating, air conditioning, plumbing, and roof updated.
If the building was converted from a prior occupancy, it should meet all current residential building codes. Each apartment unit may have a separate heating system, or there may be a boiler building to supply heat to all units. All systems must be properly maintained on an ongoing basis. There should be hard-wired smoke/fire alarms in all units and common areas.
If alarms are battery-powered, there must be documented records of periodic maintenance. Housekeeping is critical if there is a central laundry area. Washers and dryers must be properly maintained. Items provided by the building owner, such as kitchen or laundry appliances, may be stolen by tenants or outsiders.
Premises liability exposure can be high due to the number of tenants and guests visiting the property. All buildings should meet life safety codes and be in compliance with codes on smoke and fire detection, fire extinguishers, and carbon monoxide detectors. Lead exposure, particularly on windowsills, must be considered if the building was constructed prior to 1980.
To prevent slips, trips, or falls, all premises must be well maintained with floor coverings in good condition. 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. Balconies should be regularly inspected and maintained. Locks should be rekeyed after a change in tenant to prevent unauthorized access.
Swimming pools, exercise facilities, and playgrounds should be limited to tenant use only, and be properly maintained. There should be a maintenance activity log to document the owner's response to tenants' needs. Personal injury losses may occur due to alleged wrongful eviction, invasion of privacy, or discrimination. Clear guidelines for tenant acceptability are important.
Workers compensation exposures are usually service, janitorial, or maintenance-related. Back pain, hernias, sprains, and strains from lifting and working from awkward positions are common. Skin and lung irritation can result from working with cleaning chemicals and paint. Interaction with tenants or guests can be difficult. Employees should be trained in dealing with difficult situations. Animals owned by tenants can bite or kick workers.
Inland marine exposure comes from accounts receivables for rents due, computers, contractors' equipment for lawn and maintenance tools, and valuable papers and records for leases, mortgage, and tenant's information. Duplicates of all data should be made and kept off premises for easy replication in the event of a loss. Tools and maintenance machinery should be periodically inventoried and kept in a secured area after hours.
Crime exposure is from employee dishonesty and money and securities. Background checks should be conducted on all employees. Rents are generally collected the first of the month, and there may be large amounts of cash on hand. Payments by check are the preferred method for collecting rents.
Deposits should be made promptly with appropriate security provided. Monetary transactions must be controlled through the use of receipts and regular monitoring. Access to apartments 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.
Commercial Auto exposure is generally limited to hired & non-owned for employees running errands. If there are owned vehicles, such as those used to service units, any driver should have a valid driver's license and acceptable MVR. Vehicles must be maintained and records kept in a central location.
What Does Apartment Building Insurance Cover & Pay For?
There are several reasons why apartment buildings can be sued. Here are some examples:
Slip and fall accidents: If a tenant or visitor slips and falls on the premises due to negligence on the part of the apartment building management, they can sue the building for damages. If a tenant or visitor sues the apartment building for damages due to a slip and fall accident, the building's liability insurance can cover the legal expenses and any damages awarded to the plaintiff.
Fire damage: If an apartment building catches fire and the cause is found to be due to negligence or improper maintenance by the building management, they can be sued for damages. If the apartment building is sued for damages due to a fire caused by negligence or improper maintenance, the building's property insurance can cover the legal expenses and any damages awarded to the plaintiff.
Property damage: If a tenant's property is damaged due to the negligence of the apartment building management, they can be sued for damages. If a tenant's property is damaged due to negligence on the part of the apartment building management, the building's liability insurance can cover the legal expenses and any damages awarded to the plaintiff.
Breach of contract: If there is a breach of contract between the tenant and the apartment building management, the tenant can sue the building for damages. If there is a breach of contract between the tenant and the apartment building management, the building's liability insurance can cover the legal expenses and any damages awarded to the plaintiff.
In each of these cases, insurance can provide a safety net for apartment buildings, protecting them from potentially costly lawsuits and ensuring that they can continue to provide safe and secure housing for their tenants.
Commercial Insurance And Business Industry Classification
- SIC CODE: 6513 Apartment Building Operators
- NAICS CODE: 531110 Lessors of Residential Buildings and Dwellings, 531311 Residential Property Managers
- Suggested Workers Compensation Code(s): 9012 Building or Property Management - Property Managers and Leasing Agents & Clerical, Salespersons, 9015 Building or Property Management - All Other Employees
Description for 6513: Apartment Building Operators
Division H: Finance, Insurance, And Real Estate | Major Group 65: Real Estate | Industry Group 651: Real Estate Operators (except Developers) And Lessors
6513 Operators of Apartment Buildings: Establishments primarily engaged in the operation of apartment buildings. Apartment buildings are defined as containing five or more housing units.
- Operators of apartment buildings (five or more housing units)
- Operators of apartment hotels
- Operators of residential hotels
- Operators of retirement hotels
Apartment Building Insurance - The Bottom Line
The unique circumstances of your business require unique apartment building insurance coverage. Find an agent who is adept at working with business owners just like you to tap into an excellent resource for getting the coverage you need.
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.
- Apartment Building
- Business Interruption
- Commercial Flood Insurance
- Commercial Property
- Condo Association
- Contractors Equipment
- Duplex Rental Property
- Equipment Breakdown Protection Insurance
- Homeowners Association Insurance
- Inland Marine
- Jewelers Block
- Manufacturing And Mercantile Rental Property
- Mobile Home Park
- Non-Residential Building Operators
- Office Buildings
- Shopping Center & Strip Mall
- Vacant Land
- Vacant Property
- Specialty Habitational
- Specialty Inland Marine
- Specialty Property
Commercial property insurance is a type of insurance that provides coverage for businesses against losses or damages to their business property. This can include buildings, equipment, inventory, and other assets owned by the business.
There are several types of commercial property insurance, including standard property insurance, business interruption insurance, and contents insurance.
- Standard property insurance covers damages to the physical structure of the business, such as the building, walls, and roof.
- Business interruption insurance covers lost income and expenses incurred during the repair or rebuilding process.
- Contents insurance covers damages to personal property within the business, such as office equipment and furniture.
Commercial property insurance is important for businesses of all sizes, as it helps protect against financial losses due to unforeseen circumstances, such as natural disasters, theft, or vandalism. It can also provide liability coverage in case of accidents or injuries on the business property.
To determine the appropriate level of property insurance for a business, it is important to consider the value of the business's assets, the location of the business, and the potential risks it faces. Many businesses choose to work with an insurance agent or broker to help identify the best coverage options for their specific needs.
Overall, commercial property insurance is a crucial part of any business's risk management strategy, helping to protect against financial losses and ensuring the long-term viability of the business.
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.