Do You Have Contractors General Liability Insurance Coverage?
Contractors General Liability Insurance Coverage Will Help PROTECT Your Investment!
To start, one thing that investors do not realize when flipping houses is that, by default, they become general contractors. They are the ones who will be subcontracting all work for the property. This means that if they do not have contractor liability then they could potentially be left exposed. Moreover, one has to be extremely mindful about who they hire and what kind of coverage is had over the project as a whole. In addition, the structure should also be insured after the fact. Here's what you need to know:
What Is Contractors General Liability Insurance Coverage
True to what it sounds like, contractor liability protects you and your assets in the event that the contractor is negligent or does not do their due diligence in regards to work performed on the property. For example, if the contractor is supposed to use copper wiring, but fails to do so, then you may be denied insurance altogether. Or, suppose that the contractor does an adequate job on the surface level, but there is some misstep along the way and later on down the line, your tenant, or the home buyer gets hurts and sues. Since you do not have contractor liability, then you could be the one found solely responsible. This why is why contractor liability, is so important when flipping houses, even if you have general real estate insurance.
Why You NEED Contractors General Liability Insurance Coverage
As mentioned previously, having contractor liability ensures that you and your assets are protected, especially if the contractor you hired did not do an adequate job on your property. On a construction site, anything can go wrong and thus, it is imperative that you protect your real estate investment.
Flipping houses can be extremely rewarding as the return on investment can be high. However, if you do not have contractor liability then you can find the risks to be even greater. Ensure that your investment is covered.
Are You A Real Estate Investor Shopping for Multifamily Insurance?
Real Estate Agents Who Invest In A Multifamily Dwelling NEED The Right Multifamily Insurance
Are you a real estate investor with a multifamily dwelling in your portfolio? Then you NEED multifamily insurance. In addition, there are two specific exclusions that you may need to look for when you are purchasing a new property.
Multifamily Insurance Exclusion #1 - Assault and Battery
Did you know that general liability insurance is not enough to cover a fight, an assault, an altercation, shooting, or even a dead body on the premise. Although, you may believe that these kinds of problems may not happen on your multifamily property - know that they can happen anywhere. In addition, you must also think of the litigation and potential lawsuit that may follow these types of insurance claims. For example, we once saw a case in which a multifamily property owner was sued because of improper lighting, after a fight broke out, and inevitably they won. However, the insurance would not cover because the multifamily owner did not have assault and battery coverage. If you are not protected with the right insurance, you can find yourself liable.
Multifamily Insurance Exclusion #2 - Standalone Dog Policy
In a similar vein, if you do not have a standalone dog policy then you could be potentially left exposed. Quite simply, if you are going to allow tenants to own dogs, no matter what the breed, then you would be left exposed. Also keep in mind that service animals are legally allowed, even if they are a type of bull breed. That means if the tenants' dog bites another resident, or a visitor, you can be sued by the victim. There have been cases in which a multifamily investor has been sued over a dog attack and insurance did not cover the resulting damages. Thus, when getting multifamily insurance, your agent needs to know what would be best for you and your investment.
Knowing the above exclusions is only part of the process of getting multifamily insurance that helps your investment. Secondary would require finding the right insurance agent. At Benchmark we make it easy to shop for insurance and find the rates that work best for you.