Property risk, liability exposure, lease structure, and the coverage gaps that CRE owners, operators, and investors face.
Commercial real estate carries risk at every level — from the physical structure to the lease agreements to the environmental history of the land. Many CRE owners are underinsured without knowing it, carrying coverage that was priced for a different market or a different building value. Breaking Risk explains how property risk actually works and what your coverage should be doing.
Many CRE policies are written on an ACV basis, which means depreciation is applied at claim time. Understanding the difference before a loss is critical.
If your property is damaged and tenants can't occupy, your income stops — but your mortgage doesn't. Business income coverage fills this gap, but limits and waiting periods matter.
Lease agreements typically require tenants to carry insurance and name you as additional insured. Verifying compliance is an ongoing responsibility, not a one-time task.
Standard commercial property policies exclude flood and earthquake. Depending on your location, these exclusions can represent your largest uninsured exposure.
Prior uses of a property can create environmental liability that surfaces years later. Pollution legal liability policies address this exposure.
Most commercial property policies include vacancy clauses that reduce or eliminate coverage after 60 days of vacancy. This is a common source of claim denials.
Rising construction costs have created a significant gap between insured values and actual replacement costs. Here's how to identify and close that gap.
A property sitting vacant for 60 days may have dramatically reduced coverage. Most owners don't discover this until after a claim.
Collecting certificates of insurance from tenants is not the same as verifying coverage. Here's what you actually need to verify.
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