Commercial Property Insurance

Owning commercial real estate means one fire, storm or lawsuit can reach the building, the rent roll and the loan covenants at the same time. Commercial property insurance protects the buildings and the income an investor depends on, and at AGEMA Insurance Solutions in Overland Park, KS, we place it for real estate owners, developers and property managers. Apartment communities usually go to our habitational division for apartment insurance through HabRisk, builders on an active project can coordinate with our construction insurance program, and our other lines are listed on the AGEMA home page.

Commercial Real Estate Insurance by Property Type

Every property type brings its own mix of tenants, foot traffic and valuation questions, so the program starts with what you own. We insure multifamily and apartment buildings, single-tenant and multi-tenant office buildings, retail and shopping centers, industrial properties and warehouses, and mixed-use developments. Lessor's Risk Only (LRO) portfolios, where tenants run the operations and the owner holds the building, are another regular placement. Real estate developers and property management firms round out the accounts we see.

Commercial Property Insurance and the 80% Rule

Owners often ask what the 80% rule in property insurance means, and the answer is the coinsurance clause found in most commercial property policies. The clause asks you to carry a limit of at least a set share of the property's value, usually 80%, and a building worth $1,000,000 at 80% needs at least $800,000 of coverage. If the limit falls short at the time of a loss, the insured shares a higher proportion of that loss, because the payment is reduced by the ratio of the insurance carried to the insurance required, before the deductible. That is why we review valuations before every renewal instead of rolling last year's numbers forward.

Business Property Insurance for Developers and Managers

Property coverage is only part of the program for a real estate business. Commercial general liability responds to third-party bodily injury or property damage on your premises, such as a slip-and-fall in a lobby or parking lot. Loss of rental income coverage can replace income when a covered loss makes space unusable, and builder's risk protects a structure, materials and equipment during construction or a major renovation. Property managers and real estate firms also face claims of negligence in their professional duties, which errors and omissions (E&O) coverage is built for. All coverage is subject to each carrier's terms, exclusions and underwriting.