For owners of office buildings, retail strips, warehouses, and mixed-use property leased to commercial tenants.
Lessor's risk only — LRO — is the coverage for an owner who leases a commercial building to tenants without operating a business in it. A complete program includes building property at replacement cost, general liability on an LRO classification, loss of rents, ordinance or law, and equipment breakdown. The three things that decide whether the program works are your building valuation, your vacancy position, and whether you are collecting tenant certificates.
Replacement cost coverage on the structure, roof, and permanently installed equipment. The limit needs to satisfy your coinsurance percentage or partial claims get reduced.
Premises liability for the owner, as distinct from the tenants' operations. Covers slip-and-falls in common areas, parking lots, and stairwells.
Replaces rental income while the building is untenantable after a covered loss. Set against gross annual rents at full occupancy, with a realistic restoration period.
Pays for the code upgrades a rebuild triggers — sprinklers, ADA, electrical service — which a standard property limit will not.
HVAC, elevators, boilers, and electrical systems. Mechanical failure is excluded on standard property forms and is a common, expensive loss in older buildings.
Lenders and larger tenants routinely require $2M or more in combined limits.
Most commercial property policies carry a coinsurance clause requiring you to insure the building to a stated percentage of its replacement cost, commonly 80% or 90%. Insure it for less and the carrier pays claims at a proportional reduction — including partial losses, which are the overwhelming majority of claims.
Construction costs across the Charlotte region have moved substantially in recent years, and a limit that was accurate five years ago may no longer be. An owner carrying a $900,000 limit on a building that now costs $1.4 million to rebuild is not merely underinsured on a total loss; they take a haircut on a $60,000 roof claim too. Reviewing the valuation is dull, unglamorous work, and it is the single most valuable thing we do on a property account.
Standard commercial property forms cut back coverage once a building has been vacant beyond a set period — commonly 60 consecutive days. After that point, losses from vandalism, glass breakage, water damage, sprinkler leakage, theft, and attempted theft are typically excluded outright, and most remaining covered losses are paid at a reduced percentage.
This catches owners between tenants far more often than you would expect. A building that loses a tenant in March and sits empty through May is in vacancy territory by the time the pipes freeze the following winter. If you know a space is going dark, tell us before the clock runs, not after the loss — vacancy permits are available, but not retroactively.
Your tenants' operations are exposures you did not underwrite and cannot control. Risk transfer through the lease is how you keep them from becoming your claims.
Certificate tracking is tedious and it is exactly the kind of thing that separates a property owner who has a manageable renewal from one who doesn't. It is part of what we do on these accounts.
Licensed in five states. We write this coverage across North and South Carolina — our primary markets — as well as Tennessee, Virginia, and Florida.