Q: My commercial property will be undergoing renovations. Does my policy cover that?
A: For buildings that are unoccupied during a renovation, we need to explore a Builders Risk policy. These policies are for three-, six-, nine or 12-month terms. Builders Risk policies include replacement cost of the building, renovations and vacant status. Upon project completion, insurance can to be converted into a Commercial Property policy.
Q: As a landlord, what “red flags” should I be aware of with regard to tenants in my building?
A: A1: Tenant’s insurance. Your lease agreement with your tenant(s) should specify your insurance requirements. Your tenant(s) should list you as an Additional Insured, and they should furnish proof of insurance for you. If something happens in your building as a result of a tenant’s business, you want the tenant’s policy to respond to any claims, before your policy responds.
A2: Operations of your tenants.
Insurance companies accept certain classifications of risk and avoid others. For example, before converting a portion of your building into apartments, or allowing a restaurant business to open in one of your suites, discuss it with your agent. If your insurance company avoids these types of risk, you may need to seek an alternative insurance carrier.
Q: My tenant went out of business, and now there is no one in my building. Is that OK?
A: If you are able to get a new tenant in the space immediately, you may be OK. If we are approaching 60 days, we may need to look into vacant property policies. It’s best to discuss the situation with your agent so that you understand any vacant property language in your policy. I95