As a landlord, your insurance policy protects you in the event of a catastrophic loss. Your basic commercial insurance program should provide coverage for your building, rental income and your landlord liability. As you review your declarations page, you may find other line items providing some additional coverage. Based on your personal risk profile and insurance strategy, either low cost or best coverage, you may want or need these additional limits to provide protection where you actually have the risk.
The most overlooked additional coverage which can be added to your current policy is business personal property. These are items added to an apartment building for functionality, but may not be considered part of the building in the event of a loss. Items like refrigerators, washer/dryers, blinds or any other items plugged in, placed or attached to the property are covered by the business personal property limits. At Commercial Coverage, we use $2,000/unit for standard apartments as an estimate for business personal property limits.
Based on your policy and your insurance strategy, either low cost or best coverage, you may have additional coverage within your policy providing coverage for trees/plants/shrubs, valuable papers, account receivables, computer & equipment, personal property of others, money and securities and many others. In many cases, these coverages are not thought of as single items you should claim against but additional coverage in the event you have larger property loss.
Your commercial insurance program/strategy is different than a homeowner’s policy because commercial insurance carriers believe landlords should be able to cover most small losses themselves. In the event you use your commercial insurance program as a maintenance policy, making many small claims, the current and future carriers will not be interested in providing you or the property their best rates. The thought here is your loss history is a reflection of the property and the management. Many small claims on your loss history could indicate the property is in poor condition or the management is not actively maintaining the property. In either case, a small and frequent loss history is not a favorable report for the carrier.
In summary, the additional coverage provides the most benefit when you have a substantial loss. These additional limits can provide additional funds to bring the property back to its original condition. Although you may be able to make claims against each line item separately if you incurred a small loss, it is not in your best interest as it may reflect poorly on your loss history and prevent you from receiving the best rates for your property coverage. At Commercial Coverage, we offer both low cost and best coverage strategies to fit your particular risk profile. Call us today to review your current coverage and how we will work for you.