Many types of insurance are relevant to commercial real estate, but the types you’ll most likely want to consider ahead of purchasing are: property insurance, liability insurance, and workers’ compensation insurance.
Commercial Real Estate – Property Insurance
It goes without saying that commercial building purchases are major transactions for real estate owners across all property subtypes and price points. Having adequate property insurance is perhaps the most fundamental way to protect such an investment.
Property insurance policies will generally cover damage to a commercial building caused by accidents, natural disasters and certain other events, such as a fire. Even terrorism coverage - especially in the post-9/11 world – is considered by many larger commercial real estate owners to be an important subtype of property insurance. You can also add extra coverage to a property insurance policy to ensure that specific items in the building are covered, including glass, machinery, and other equipment.
Commercial Real Estate – Liability Insurance
Liability insurance policies typically cover injuries to others. Like property insurance, you can add other coverage to a liability policy, such as errors and omissions insurance. This type of insurance provides coverage for accidental mistakes that cause injuries. Liability insurance is particularly important if customers frequent your commercial property, because it typically applies only to injuries that occur on the property itself.
Commercial Real Estate – Workers’ Compensation Insurance
While liability insurance covers injuries to customers and other visitors on your commercial property, workers’ compensation insurance covers injuries to workers that occur on the job. In some instances, workers’ compensation policies carry mandatory arbitration provisions that in effect prevent a worker from suing the employer for negligence. Many states require businesses to carry workers’ compensation insurance as well, so in any case, be sure you check with a licensed labor attorney to be sure you’ve found the appropriate amount of coverage.
Getting Help with your Commercial Real Estate Purchase
Commercial property owners would do well to shop around thoroughly when looking for the best commercial real estate insurance policies. After all, what is more important to your commercial enterprise than protecting its growth and success? Now more than ever, having comprehensive, robust insurance coverage is the best way to give yourself that protection.
On the same note, such a high stakes economic environment also strengthens the need to have an experienced real estate attorney in your corner. An attorney who specializes in commercial real estate transactions in particular can save you time, and help ensure that you fully understand the web of laws and regulations that govern your insurance premiums! If you haven’t hired an attorney yet, or are unsure of how useful legal counsel would really be for your real estate purchase, then contact a licensed attorney in your jurisdiction for a free initial consultation.