A Look at Commercial Real Estate Insurance For Those in Property Management

Property management experts need to have specialized commercial real estate insurance to ensure that all of their losses are covered in the event something happens to their buildings. This insurance will provide you with the means to repair or rebuild the building. It should also compensate you for all of the financial losses incurred when renting an apartment complex is no longer possible due to circumstances beyond your control.

Protection For The Building

If something would ever happen to the building you are renting an apartment out of, you need to know you are able to repair or replace it. Commercial real estate insurance providers do this in one of two ways. They will pay the property management the actual cash value of the building or the current replacement cost. The contents and equipment in the building are covered through the plan even if they are off the property at the time they are damaged or lost.

Make sure the provider you work with will cover you for the lost value of the undamaged portion. They should pay to have the good section demolished, or for the additional construction expense when joining the original segments of the building with the new portions. Your policy should cover the miscellaneous expenses and occurrences as well. This includes earthquakes, fire coverage that pays for the fire department and equipment, equipment breakdown, pollution and debris removal, and the outdoor property and items.

Financial And Crime Protection

When renting an apartment is no longer possible, the effects of this problem can cut deep into the property management's pockets. There is tons of money going out to fix the building, but at the same time, there is no money coming in. A good commercial real estate insurance plan will cover the loss of income and the expenses associated with the loss of a building. In many cases, it will even cover all of the costs associated with bringing the tenants back after the repairs or replacements have been made. Your accounts receivables and other valuable papers are also included.

Crime and dishonesty can cripple a property management expert. This type of policy should cover you for losses caused by an employee, forgery, fraud, money orders, and counterfeit currency if these issues were to arise. It also covers a loss of money and securities from inside or outside your investment.

Liability

Without the proper coverage, someone who gets hurt while on your property can come after you for the bills. With a good commercial real estate insurance plan, you will be protected against these types of losses. It will cover anyone in your employment, contractors, and yourself. It might also include auto liability for vehicles, even if they are rented, personal, parking lot liability, operations, and advertising injury liability. This doesn't relieve your responsibility to those renting an apartment, but it will help with the financial end of an accident.

By purchasing commercial real estate insurance, property management is covered financially in several areas. Those who fail to purchase this kind of protection could very well end up paying for their mistake for the rest of their lives.

About the Author: Christine O'Kelly is an author for a top property management company, Beal Property in Chicago. For more than 80 years, Beal Properties, LLC has been renting an apartment in many of Chicago's historic neighborhoods.