4 insurance coverages to consider as an apartment complex owner

If you own an apartment complex, you might be worried that the insurance side of things could get complicated. You face a lot of risks as a landlord, both liability-wise and property-wise (apartment buildings aren’t cheap, after all!) It’s crucial to get the apartment complex insurance you need to protect yourself from the risks you face. There are many apartment complex insurance coverages you can consider, and we’re going to go over four of the main types of insurance you can consider for your apartment building.

4 apartment building insurance coverages to consider

1. General liability insurance.

This one is very important. As the landlord, you’re responsible for maintaining the common areas of the apartment building, which might include things like the hallways, lobby, gym, pool, parking lot, and so on. The thing is that you could be held liable if someone gets hurt in one of these common areas, and they could sue you over it.

That’s where general liability insurance can help you. It can help cover you if someone alleges that you caused them property damage or bodily injury. General liability can help you cover the legal expenses of a lawsuit if the injured person decides to sue, and it can help you cover the costs that you’re legally obligated to pay to that person (for example, court-ordered awards or settlements.) Lawsuits, of course, can get very expensive very quickly.

To give an example, let’s say that one of your tenants has a guest over to visit. They’re walking through the lobby when they trip over an uneven section in the carpet, and they break their wrist and hit their head. They decide to sue you over the injuries they sustained. Your general liability insurance could help you cover the costs you face.

2. Property insurance.

Property insurance is another coverage to consider. You’re the one who owns the building, so it’s a big investment for you. Property insurance can help protect you if the building is damaged by a covered loss. There are a lot of potential disasters that could cause serious damage to the structure of your building, which is why property insurance is extremely helpful.

However, you have to make sure that you know which losses will be covered by your property insurance policies. The following are typically covered:

  • Fire
  • Damage from smoke
  • Windstorms
  • Vandalism
  • Lightning
  • Vehicle and aircraft damage
  • Explosions
  • Riots

(Again, though, you have to make sure that you understand the losses that your policy will cover to make sure you don’t have any nasty surprises.)

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3. Business income.

If your tenants were forced to leave their apartments due to a covered loss, you’d be looking at some pretty significant financial losses. You wouldn’t be taking in any rent since you can’t exactly expect people to pay for a place that they can’t live in.

Business income or business interruption insurance can help reimburse you for the income you lose while your building is out of commission due to a covered loss. That way you wouldn’t have to worry about the fact that you’re not collecting any income during the time that your building is being repaired or rebuilt.

For example, let’s say that fire is a covered loss under your insurance policy. There’s an electrical fire that means your tenants aren’t able to live in their apartments. It’ll take a while to get your building back to normal. Business income could help reimburse you for the income you’re losing while the apartment building is being repaired.

4. Umbrella insurance.

Liability insurance is great, and it offers valuable financial protection. However, you might someday encounter a claim or a situation that is bigger than the limits on your underlying liability policy. When the limit of your liability policy is exhausted, you could be on the hook for the rest of the claim.

But that’s where umbrella insurance can kick in to help. It provides coverage that goes above and beyond what’s offered by your underlying liability policy. When your liability policy taps out and is exhausted, your umbrella can step in to help cover what’s left of the claim. It basically gives you additional liability insurance that sits on top of your other policy.

It’s easiest to illustrate with an example:

Your general liability insurance has a limit of $1 million. It won’t pay any more than that. However, you end up facing a whopper of a liability claim – it’s going to be $2 million. Fortunately, you have a $3 million umbrella policy. Your general liability would pay its $1 million and your umbrella would kick in to cover the remaining $1 million.

Other coverages you can consider for apartment building insurance.

Of course, these aren’t the only policies that can protect you from potential risks. Some other insurance coverages you can consider for an apartment building are…

  • Crime insurance
  • Employee dishonesty insurance
  • Directors and officers insurance
  • Errors and omissions insurance
  • Equipment breakdown insurance
  • Cyber liability insurance
  • And more

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Still wondering what kind of coverages you need for your apartment complex? Our team of insurance professionals is here to help. We can help you get the apartment building insurance you need to protect yourself from the risks you face every day. And insurance is easy when you work with our team – we’re not in the business of making things more complicated than they have to be. Get in touch with our team by filling out our online quote form or giving us a call today.