For the right person in a suitable situation, rental property is an excellent investment. However, unlike most traditional options, you must keep plowing back your profits to safeguard your investment.
In addition, landlords face multiple risks.
For instance, rental properties require periodic maintenance. If the roof starts leaking, fixing it requires your time and money. Similarly, if a tenant is injured because of poor maintenance, they can sue you to cover the damages related to the injury.
Fortunately, landlords can shield themselves from unexpected losses using commercial umbrella insurance for rental properties. Consider buying a commercial umbrella insurance policy from a trusted insurance agency in Northridge, CA.
Commercial umbrella insurance is a type of coverage that supports standard liability policies like rental property coverage. It offers much more extensive protection with an extended policy limit.
Commercial umbrella coverage primarily aims to safeguard your assets against accidents and unforeseen circumstances where you’re held accountable for personal injury. The cover protects the landlord against owner liability and injuries tenants, guests, or vendors may sustain on the property.
A landlord must have one or more underlying liability cover to obtain commercial umbrella insurance for rental properties.
For example, the liability insurance policy covers the initial claim if a vendor gets injured in a rental property and makes a claim. However, if the payout exceeds the policy limit, the umbrella insurance for rental property covers the rest.
Buying landlord liability insurance doesn’t rule out the need for commercial umbrella insurance. Although this coverage protects property owners, it still has weak points for which commercial umbrella insurance can compensate.
Most landlords acquire landlord insurance without question because it covers them against property damage or liability claims. Unfortunately, landlord liability insurance has a limit of $500,000 to $1,000,000, which is enough for most single property owners.
However, some claims can surpass the limit of a landlord’s liability policy. In a fire incident, it is possible to encounter a claim of up to $ 10 million. Unfortunately, it might be beyond the landlord liability limit, highlighting the need for commercial umbrella insurance.
Commercial umbrella insurance is a convenient plan because it can provide coverage for multiple properties. A single cover can protect the entire investment if properties are spread in different states.
Similarly, if your client owns properties in different areas, you can buy a single cover to protect the entire investment.
With commercial umbrella insurance for rental properties, you may have protection from events not covered by your underlying policies, including:
Commercial umbrella insurance provides coverage that can kick in when your primary insurance packages have been exhausted. It, therefore, ensures you and your rental properties are protected when you need it most.
It may cost you more to enjoy the added protection of commercial umbrella insurance. Even so, umbrella insurance is a cost-effective solution for property owners compared to the cost of facing a lawsuit or liability claim.
The umbrella insurance becomes active when the primary coverage limit runs out. Commercial umbrella insurance can also cover multiple properties situated in different states.
Typically, the umbrella insurance offers the following coverage:
A landlord can be legally liable for tenant, guest, or vendor injuries at the rental property. In addition, if a tenant becomes ill due to exposure to mold and other poor living conditions, they could be held legally liable.
Commercial umbrella insurance can cater to the legal fees, court fees, and settlements arising from the lawsuit or liability claim.
If a tenant or a guest becomes injured on the property, the commercial umbrella coverage can provide additional protection if your standard policy proves insufficient. It can cover medical care-related costs, including medication, physical therapy, hospitalization, surgical expenses, and continued care.
If a former tenant breaks in and steals or damages property, the commercial umbrella coverage provides additional protection for the damaged items. Similarly, tenants enjoy additional coverage for lost or damaged items in case of fire or flooding damage.
Each insurance cover has exclusions; similarly, the commercial umbrella for rental properties doesn’t cover:
When selecting your coverage limits, there are three essential items you should consider:
If you’re sued and slapped with a settlement demand, you may be forced to use rental income to pay the bill. While some settlements are minimal, most are substantial and are likely to disrupt your finances.
Consider buying commercial insurance for rental properties from a reputable firm like Panorama Insurance Agency to minimize losses.
Contact us online or call us at 816.658.2867 to get a free quote.