Apartment Building Insurance: Everything You Need to Know

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As the owner of an apartment complex, insurance can be complicated. This post will cover four types of insurance worth looking into for your apartment building.

As the owner of an apartment complex, you may wonder if the insurance component of your industry could get a little complicated. Landlords face liability and property risks, so it’s crucial you have the right apartment building insurance to protect yourself from inevitable risks.

Without the right type of apartment building insurance in place, and the right level of coverage, you put yourself at risk of unnecessary financial problems when things go wrong.

While there are many apartment complex insurance coverages to consider, this post will cover four types of insurance worth looking into for your apartment building.

What Types of Apartment Building Insurance Do I Need?

General Liability Insurance

As landlord, you hold the responsibility of maintaining common areas of your apartment building. These areas could include hallways, the lobby, gym, pool, parking lot, and more.

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If someone were to get hurt in these common areas, you could be held liable, and they could sue you over it. So, general liability insurance is very important for the apartment complex owner. 

If someone alleges you caused them bodily harm or property damage, general liability insurance can help you in a few ways.

General liability policies assist in covering the legal expenses of a lawsuit if the injured person were to sue you, and a general liability policy also can help you cover the costs you’re legally obligated to pay to that person. And, it’s no surprise that lawsuits can get expensive — FAST. 

When it comes to apartment building insurance and general liability, there are a few things you can do to reduce your risk of being subjected to claims:

  • Make certain you have the right amount of coverage.
  • Keep your property maintained/safe.
  • Make/keep security a top priority.
  • Respect tenant privacy.
  • Communicate with tenants any potential dangers.

Property Insurance

Another type of coverage to consider as an apartment owner is property insurance.

Your apartment building is a large investment for you, and property insurance can help protect you if the building is damaged by a covered loss.

Because there are numerous disasters that could seriously damage the structure of your building, property insurance is incredibly important. 

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Not all types of damages are covered by a property insurance policy. It’s important you understand what types of losses your policy will cover so that you aren’t taken by surprise.

Generally, property insurance policies cover the following types of losses:

  • Damage from Smoke and/or Fire
  • Windstorms
  • Vandalism
  • Lightning
  • Vehicle damage
  • Explosions
  • Riots

Business Income Insurance

If your tenants were forced to leave their apartments due to a covered loss, you wouldn’t be able to take in any rent.

This would lead to a significant financial loss for you! Business interruption insurance (or business income insurance) assists in situations such as this.

Business Income Insurance can help reimburse the income loss you may experience when your building is out of commission due to a covered loss.

This frees you from having to worry about not being able to collect income during the time your building is being repaired. 

Umbrella Insurance

If you were to ever encounter a situation larger than your liability policy limit, you’d be responsible for the remainder of the claim. That’s why you need umbrella insurance.

Umbrella policies provide coverage that go beyond what your liability policy provides. Once your liability policy is exhausted, your umbrella policy steps in to cover the remaining portion of the claim. 

It’s like additional liability insurance, atop your other policy.

For example, if your general liability insurance has a $1 million limit, it won’t pay more than that.

If you were facing a liability claim larger than $1 million, you’d be responsible for any dollar amount exceeding $1 million. But let’s say you have a $3 million umbrella policy- this means you’d be covered.

Your general liability would cover the first $1 million, and your umbrella policy would cover the remainder of the claim (up to $3 million, in this case). 

Other Apartment-Related Types of Insurance

While these are certainly some of the most important apartment complex owner insurance policies to consider, there are plenty of other types of policies that can protect you.

Some other coverages to consider for your apartment insurance are: 

  • Errors and Omissions Insurance
  • Employee Dishonesty Insurance
  • Crime Insurance
  • Cyber Liability Insurance
  • And More

How Much Does Apartment Building Insurance Cost?

The answer to this question will depend on what types of policies and how much coverage you choose. It also depends on the size of your apartment building(s), your location, number of units, and more. 

Also remember that any apartment building insurance you purchase will include a deductible you’re required to meet in the event of filing a claim. Be aware of this when deciding on your policy/coverage, and make certain you understand all aspects of this deductible.

This is especially true if you own an apartment building with multiple complexes — in the event of catastrophe, do you have to meet that deductible on each building? 

We Can Help With Your Apartment Building Insurance Needs

Whether you own a single building, several properties, or a large complex, M&P offers insurance policies tailored to the type of coverage you want for your unique situation.

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We have local agents who work with numerous insurance companies to provide you with the best coverage at rates that meet your budget.

Let us help you today!

Give us a call at (870) 523-6771

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