Why Apartment Building Owners Need Insurance

In Multifamily & Apartments by Tim DieselLeave a Comment

Commercial insurance. It’s just part of apartment building ownership. When you invest in multifamily housing, you do so to earn an return. But, that means needing a performing asset. And, anything that possess a risk to said asset is something utterly concerning. After all, a large investment is worth protecting. Since it’s so big, you probably don’t have the means to self-insure against any and/or all risks. So, you need insurance which is simply a smart business decision. It’s the transfer of risk.

Apartment Building Owners need Commercial Insurance because of these Risks

Speaking of risks, just which ones should you be most concerned about? Well, there are some which are quite obvious and others than aren’t as conspicuous. For instance, advertising liability. Making false representations in your advertising is not only a bad business practice, it’s illegal. Even if it’s unintentional, it represents a whole lot of trouble. And, that’s something you certainly don’t need to invite in any way.

It is so very important that you make sure you’re completely covered if something goes wrong – even if the chances are remote. It’s essential to have the proper insurance policy in order to keep you from unnecessarily losing money or assets that may be impossible to recoup. —Landlordology.com

Along the same lines are libel and slander. While probably not a huge concern, there are instances where people have gotten into a pickle. Then, there are things like loss of rental income. Sure, it’s probably not a real threat but there are scenarios which could materialize. For instance, catastrophic damage which leaves the majority of units uninhabitable.

Biggest Risks Apartment Building Owners Face

While we’re on the subject of catastrophic damage, let’s take a quick look at the biggest risks apartment building owners face and why you really need commercial insurance coverage:

  • Bad acts. One risk that comes with such a huge venture is the need to rely on several or numerous people for the day-to-day activities. These include property managers and more. And, since you aren’t present for every interaction, bad acts, like misrepresentation or fraud could occur.
  • Personal injuries. Of course, there is always the risk of injury to others. A tenant slips and falls on the property. Someone trips and suffers a severe injury. There are all kinds of situations which call for commercial insurance coverage.
  • Discrimination lawsuits. Getting into the more heavy scenarios brings us to discrimination. Now, it’s obviously something you don’t at all condone, but that doesn’t make it impossible. All it takes is a believable allegation.
  • Catastrophic property damage. Last but certainly not least is catastrophic damage caused by a inclement, tropical weather, fire, and/or flood. Nature can easily wreak havoc on a property and cause serious damage.

If you’d like to learn more about commercial real estate investment benefits and more about insurance or ownership, please contact me.


Join our weekly newsletter

Get our latest articles delivered to your inbox.

Leave a Comment