Insurance for multi-family

[Andy S.]

Hello BP, I'm looking at small apartment complex in my area, between 10-16 units. I'm talking to insurance agents to get quotes. -What type of property coverage and liability coverage is good for apartments this size? -what are some of the things you would want your insurance company to include (ex. Loss rent, etc)? Any other tips would be appreciated! Thank you!

[John Mocker]

Andy,.

The First policy you will need is a package of the Liability & Property. Depending on the number of units it could be:

  Commercial Package or

  Business Owners policy (aka BOP)

There are other coverage that you should look into and that would normally be part of the above policies such as:

- Loss of Rents / Business Income.

- Contents (for your contents such as stoves, refridgerators, etc. in the units).

- Money & Securities

There are other coverage items that may be recommended depending on the property:

- earthquake.

- Water Backup.

- Loss Assessment if it is a condo unit or part of HOA.

- Ordinance & Law if the building laws would require rebuilding with different methods

     that may cost more.

- EDP / Computer coverage / Cyber Liabiltiy

The Umbrella policy is designed to give additional liability coverage that kicks in when the limits of the underlying policy(ies) are exhausted. Depending on what policies you have there will be minimum limits you must have before the Umbrella would start. Most Umbrella's over the Package or BOP policies would require that they have $1,000,000 limits.

Flood Insurace, even if you are not in a flood zone, should be looked at. Thousands of homes in TX, LA, & FL are dealing with flood damage right now that are not in flood zones.

Workers Compensation coverage if you have anyone on payroll, any subcontractors that do not have their own coverage, or if you have any Statutory employees (most common would be realtors).

Business Auto may be needed depending on the ownership, size, type, and use of the vehicles used to service the properties.

Equipment coverage may be needed if you have Tools and Equipment you use to maintain the property such as Tractors, Bobcats, power washers, generators, etc.

Builders Risk policy could be needed if you are renovating a property before renting it out.

Hope this helps with some possible policies you may need. Feel free to PM me if you want a better explanation of any of the policies.