3 Reasons for Purchasing Commercial Real Estate Insurance

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Investing in property is not all about the green. While it’s true there’s a lot of money to be made in property investment, there’s a considerable amount of risk as well. Factors both natural and human can negatively affect a property investment, and the stakes are even higher for those investing in commercial real estate. It’s for this reason, among others, that many investors choose to take out commercial real estate insurance policies. These policies are often expansive, providing much-needed protection in the event something goes wrong.

Don’t invest in commercial real estate without taking out the necessary insurance; that’s rule number one! If you want to learn more about why commercial real estate investor insurance is all but required in the real estate market, read on.

  1. Natural Calamities Can Destroy an Investment

a real estate purchase

The term “natural calamity” is often associated with storms and natural disasters, like hurricanes, tornadoes, earthquakes, and wildfires. But acts of Mother Nature are not the only events that can damage a property. Ruptured pipes, electrical fires, excessive mold, and bug infestations can also cause mayhem for a property owner/investor.

Water damage specifically is the bane of many property investors. With water damage comes many more significant problems: compromised structure, mold and mildew infestations, and musty smells are just a few examples. Many savvy investors purchase private flood insurance to protect themselves against flood and water-related damages, and commercial property investors in particular prefer this insurance because it protects their substantial investments.

  1. Unruly Tenants Can Destroy an Investment

Of course renters are not responsible for the wear and tear a building is naturally going to accumulate over time, but some renters damage the property they’re leasing either by negligence or ill will. In such instances where unruly tenants damage the property they’re leasing, having real estate investor insurance is ideal. If tenants should cause something like water damage or fire, the property must be insured so the entire investment isn’t lost. Questions of liability are also important to address ahead of time; tenants must know whether or not they’re responsible for significant damages in advance.

  1. Coverage Is Expansive and Customizable

An important aspect of good commercial real estate insurance is expansiveness: a policy should cover a broad range of potential hazards, and it should also allow for multiple properties to be insured. Rarely is the case that a property investor only has one investment, so expansive policies, those that cover multiple properties and a wide variety of hazards, are common in the commercial real estate market. These policies are also taken out in conjunction with other policies like private flood insurance, and many investors find that maximum protection translates to boosted ROI.

Where to Go for Exceptional Commercial Real Estate Insurance

If you’ve been looking for expansive, first-rate real estate investor insurance, get in touch with us now! We here at Cobalt Steele always enjoy talking to potential policyholders about the importance of insurance for commercial properties.