An important part of managing commercial property involves protecting your assets. As an owner, tenant, or agent of a commercial real estate, you need to have a Certificate of Insurance (COI). Here is why it is important to have one.
The COI is a detailed document of your insurance coverage. It protects you against any accident, damage, or other unexpected incidents. It states the conditions for claiming damages. It is proof of your liabilities and with those involved in the property as well. Providing a COI can help reduce insurance risks to your commercial real estate.
Your insurance policy should have a wide coverage for more protection. It must also consider anyone working on or leasing your commercial space. This includes subcontractors and tenants. However, what kind of coverage do you need for your commercial property?
Options for commercial property insurance
Let us first define property damage and personal liability. These are the two main risks in commercial real estate properties.
Property damage can be natural, accidental, or by a third party. Examples of which are storm, fire, burst pipes, vandalism, or theft. Personal liability refers to being legally responsible for physical and mental injuries.
Choose an insurance policy with property and general liability coverage. This helps you avoid the high cost of repair and payments. Make an inventory of assets in your property. Therefore, you will know the replacement value and the kind of coverage you need.
These are the main types of property insurance coverage for your protection.
- Replacement Cost – This provides the same or equal value for the cost of repair or replacement. It covers the replacement cost values, not the cash value.
- Actual Cash Value Coverage – This is the replacement payment minus depreciation.
You get the value based on the age of the destroyed item.
- Extended Replacement Costs – This pays more than your coverage limit. As long as it does not exceed 25% of the maximum benefit limit. This could happen when the cost of construction increases.
Here are other forms of commercial real estate insurance to consider. These are more specific but can provide extra protection.
- Loss of Income – This provides financial protection for property owners during rental vacancies.
- Flood Insurance – Required for properties in designated flood zones. Coverage also includes damaged water pipes.
- Builder’s Risk Insurance – This covers properties while under construction. It includes property damage and injury of construction workers. Nevertheless, this is more expensive than regular hazard insurance.
- General Contractors Insurance – Required for licensed general contractors in securing permits.
- Workers Compensation – Coverage includes wage substitution and medical benefits due to injury. In exchange, the employee agrees not to sue you for losses incurred.
Tracking COIs for easy reference
If you are in commercial real estate, securing COIs is beneficial to your business. You need to stay informed of insurance coverage details. In addition, they can vary from one group to another. You have to be aware of any updates in the provisions. You should know your legal duties on liabilities. With so much involved, that is A LOT on your plate to track on your own. When it comes to property insurance, you have to work smart.
You need the services of a reliable COI tracking system. We can collect, verify, and enforce your COI requirements for you. You will save more time, effort, and money. Therefore, you can focus on managing your property efficiently. Moreover, gain more revenue for your business. Book your request for a certificate tracking demo from COI Tracker today.