Mixed-Use Commercial Building Insurance
Mixed-use buildings are growing in popularity across the country and throughout New Jersey and surrounding areas. These buildings offer exceptional versatility for owners and accommodate a wide range of use for tenants. However, they present unique challenges when it comes to insurance that requires specialized coverage to protect.
Many mixed-use buildings feature commercial property spaces on lower floors and residential areas on the upper floors of the buildings. Many even feature different types of occupants in the retail spaces as well.
For instance, you might find a bakery or restaurant next door to a florist or retail shop. Additionally, each of these interests requires different types of insurance protection for businesses and residents. Plus, you, as the building owner, require different types of protection as a result.
Insuring Mixed-Use Buildings
The first responsibility you have to yourself is to secure the investment you’ve made in the building with adequate insurance protection. This protects your investment, provides peace of mind, and helps you rebuild in the aftermath of covered events, like fires, storms, vandalism, etc.
There are several types of insurance protection to consider:
- General liability protection
- Theft of landlord’s items (janitorial supplies, paint supplies, decorations, artwork in building lobbies, etc.)
- Loss of rental income when renters are forced to vacate while repairs are made in the aftermath of covered events
As a landlord, your building is your business. You need insurance specifically to protect your business not only in good times but in the bad times as well.
You should also consider insurance coverages that every other business has, such as:
- Business owner’s policy. This covers the equipment and supplies kept in your leasing offices, among other things.
- Workers compensation insurance. This is important to protect the people who work for you if they are injured while performing their work for you. It is likely required of all businesses that have employees.
- Water backup protection. Essential coverage if sewers and drains back up.
- Flood insurance. This is especially important if your mixed-use building is in a flood zone.
- Replacement costs coverage that doesn’t deduct money from claims according to the depreciated value of the items. It pays the costs of replacing them instead.
- Additional liability protection. Many businesses find that the general liability coverage offered in the Business owner’s or landlord’s policy is insufficient to meet their needs and comfort levels. Additional protection helps to fill in the gaps.
- Umbrella liability policies. This offers additional liability protection in addition to coverage that kicks in once general liability limits are exceeded.
- Equipment breakdown coverage. Insurance for equipment such as boilers and machinery you own for the buildings.
- Replacing landlord provided appliances. Replacing appliances in tenant apartments, co-ops, condos, etc.
- Replacing elevators, hallways decorations, carpeting, wall coverings, etc. Items external to the tenant’s apartment.
The better you know the risks your buildings face, the more you can understand the specific types of protection you need to protect them.
Types of Damages and Exposures
Mixed-use building owners face damage and destruction on every front, and insurance is needed to protect you from all of them. You will find different types of insurance products to protect your buildings and your business from the following types of damage:
- Employee dishonesty
- Building ordinance
- Business/rental income
- Mechanical breakdowns
You will likely also need flood insurance for your buildings as well as supplemental flood insurance in many cases.
Do Tenants Need Insurance?
It’s important to warn your tenants that your insurance only covers your expenses and responsibilities when things happen on the property.
It does not extend to their possessions.
They absolutely need insurance to protect their business, including property and equipment, signage, inventory, etc. Residential renters also need insurance protection for the contents of their apartments, condos, etc. Both types of tenants need insurance protection against liability.
Why is Liability Protection So Important?
In most cases, when accidents or injuries occur that might bring about liability lawsuits, lawyers target everyone who might be responsible. Liability insurance not only provides protection for judgments made against you but also covers your legal fees.
Without this protection, even if found innocent of the accusations, the legal fees can be devastating. Liability insurance eliminates them from the equation, leaving tenants and building owners to pay the deductibles alone rather than facing the full costs of these legal fees.
Insurance Center of North Jersey understands the insurance needs of mixed-use building owners as well as the tenants these buildings attract. We can help you choose the right protection for your needs today and as they evolve over time.