The liability risks associated with owning leased real estate and apartments property can be enormous. Keeping up with activities of tenants, their guests, building maintenance, contractors, and building management is nearly impossible. Therefore, carrying general liability insurance on these properties is critical to your overall risk management strategy. Not only does it protect you against a wide range of potential lawsuits, it even defends you against fraudulent claims.
Landlord general liability insurance protects you against claims of bodily injury or property damage arising from a 3rd party such as a tenant, a tenant’s guest, a tenant's customer, a contractor, or even someone that isn’t doing business with you.
Due to the nature of commercial real estate and the wide variety of activity that happens on premises, claims situations vary widely.
Common claim examples:
1) Maintenance issues causing damage to a tenant or a tenant’s property.
2) Slip & falls on premises and parking lots
3) Wrongful Entry or Eviction
Liability insurance for real estate owners is generally the lowest cost portion of the insurance program accounting for less than 10% of the total premium. This can be higher or lower depending on where your building is located, how the building is constructed, and who the tenants are composed of.
Dangerous Animals Exclusion – This endorsement can read differently from carrier to carrier, but most of these exclusions state that the insurance company will not pay a claim as a result of an animal that is trained to be aggressive. If this exclusion is present on your policy, it is important to know what kind of animals your tenants might or might not have. It would be important to then not allow those type of animals on the premises.
Personal and Advertising Injury Liability Exclusion – As mentioned above, wrongful entry or eviction is a common claim for apartment owners and commercial landlords. Coverage for this would fall under the personal and advertising injury liability coverage part. We suggest not only verifying that you have this coverage, but verify that you have separate limits and not just "included".
All Building and Parking Lot Addresses Not Listed on the Policy – Apartments, shopping centers, and industrial real estate businesses often have multiple buildings and large parking lots in a small space to accommodate all their tenants and their guests/customers. Oftentimes these properties have a different addresses or aren’t on the same “premises”. We always suggest following up with your broker to confirm that the insurer does consider the parking lot as part of the premises and making sure that all building addresses are listed on the liability declaration pages.