5 Steps to Reduce your Lessor’s Risk—Start with the Right Commercial Property Insurance
There are many instances when building owners do not occupy the property they own. You probably bought your commercial property as an investment – to let its value grow while you benefit from the rental income generated by the property. As a property owner, you naturally worry about protecting that investment. There are a number of things you can do to reduce your lessor’s risk, starting with buying the right commercial property insurance.
1. Buy Commercial Property Insurance
To protect your investment and the income you earn from the property, it’s important to insure the building and cover yourself against liability risks associated with it. To do that, you must purchase lessor’s risk insurance. This type of insurance covers the lessor’s risk only. It does not cover the property owned by tenants who occupy the building.
2. Ensure the Property is Physically Sound
Keeping the property physically sound is the best way to ensure that tenants and visitors don’t get hurt on your property. Every commercial property owner is bound by legalities known as ‘implied warranty of habitability’, which means you have to make sure the rental space is in good, habitable condition for tenants. In addition, you can take other steps to prevent injuries and losses. Inspect the property for potential hazards and address any potentially dangerous situation quickly.
3. Keep Environmental Hazards Away
Removing environmental hazards can be trickier than physical hazards like potholes in the parking lot. Hazards such as lead paint, black mold, and radon gas may not be readily apparent but can be health hazards for the occupants of your property. Going the extra mile to be sure your property is free of environmental hazards – and keeping the documents to prove the effort – is one way to protect your tenants and yourself.
4. Lower the Risk of Crime on your Property
In recent years, landlords have been held partially responsible for crimes on their properties because they didn’t take steps to provide better security. To lower the risk of crime on your property, screen rental applicants carefully and have strong policies regarding access with keys. Lost keys should be treated with extreme caution.
5. Carefully Screen Employees
Hiring help always comes with a double-edge – you get the peace of mind and convenience of having someone to do the work, but that employee also comes with risk, especially if they are not thoroughly screened. Take the extra time and effort to ensure that the employees you hire have no criminal past, are not registered sex offenders, etc. If you use a contract management company, make sure the company insures their employees. Create and publish a zero-tolerance policy against sexual harassment.
Call The Nowell Agency Inc. at 601.992.4444 for more information about commercial property insurance or request a quote for coverage online. We can help determine your lessor’s risk and ensure proper coverage within your policy.