Businesses in every industry need to have the proper insurance to protect themselves from financial harm. As a commercial real estate investor, particularly if you are starting out, it might not feel like you are at the same level of risk as other business owners. However, there are still a few basic types of insurance that all real estate investors should have.
4 Types of Insurance All Real Estate Investors Should Have
- Landlord Insurance: This type of commercial real estate insurance is also known as rental property insurance. It will include the different types of coverage the real estate investors need to protect their bottom line. Depending on your needs, your policy could include things like liability coverage, hazard coverage or loss of income coverage. Landlord insurance will not cover the belongings of your renter, and it is their responsibility to purchase renter’s insurance.
- Liability Insurance: Liability coverage protects you against the financial harm that can come from accidents on your property involving tenants, the guests of your tenants, repair technicians and more. Liability insurance will also take care of offsetting your financial responsibility if something is stolen or if someone files a lawsuit.
- Fire and Hazard Insurance: Fire and hazard coverage is critical, as the hazard coverage will also cover things like structural damage that can occur as a result of theft, fire or storms. Real estate investors use this insurance to protect against accidents that can happen and lead to expensive repairs to restore the structural safety of the property.
- Water Line and Sewer Backup Coverage: Depending on your policy, this might be included already or need to be tacked on as an add-on. A clogged sewer line typically does not lead to extensive damage, but a damaged water line or sewer line can make the property uninhabitable in an instant. In some parts of the country, any breaks that occur beyond the property line are the responsibility of you as the owner and not the city or county.
Make Finances Easy at Your Commercial Real Estate Business with MKS&H
MKS&H provides tax and accounting services to businesses of every size and in every industry, including construction and commercial real estate. We can work with you to improve your company and make sure that it is financially secure now and in the future. Contact us today for a consultation.
About MKS&H: McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture and your business goals. This approach enables our clients to achieve their greatest potential.