Do you need insurance for your Mixed Use property in New York?
The coverage for a property that is “mixed-use” can widely vary from insurance company to insurance company. The reason for this is that who is in the commercial space, will determine the rate this property owner will pay.
Some insurance companies don’t like bars with alcohol as a tenant in the building ,and some don’t mind. Some insurance companies would have an issue with a tanning place and some do not. So the tenant make-up of a small plaza is important to an insurance company underwriter.
Almost all insurance companies like an accounting office or optician’s store or a dentist office….all lower risk factors for them.
Here’s a quick explanation
Say someone falls down in the bar and decides to sue the bar owner. Any good attorney will also sue the building owner, since he is the deeded owner to the property. Now, the building owner has to defend himself (or his insurance company will defend him), even though he wasn’t at fault. And who knows if the tenant didn’t let his own insurance lapse for lack of payment?
So the legal expense to defend this lawsuit, now falls on the building owner’s insurance company. Even though not negligent, he/she would still have to defend themselves in a court of law.
This is a basic reason for why the tenant make-up in a mixed-use building matters. The insurance company will look at what the potential would be to defend a lawsuit on behalf of the building owner.
Mixed-use buildings are not hard to insure, it is a matter of finding the right insurance company for the kind of risk involved. We deal with this every day of the week, as independent insurance brokers.
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