Coverage

Property

Property pays to repair or rebuild the building after a fire, a burst riser, wind damage to the roof, or a car through the storefront. The number that matters most is the building limit. It should be enough to rebuild at current construction costs, and your lender will require it to be at least the loan balance. If the limit is too low, a coinsurance clause can reduce what the policy pays on a claim.

We check two other things. One is whether the policy pays replacement cost or actual cash value. The other is ordinance or law coverage. After a serious loss the Department of Buildings can require you to bring the building up to current code, and a standard policy doesn’t pay for that added cost.

General liability

General liability responds when someone is hurt on the property: a fall on the stoop, ice on the sidewalk, a ceiling that comes down in an apartment. It pays for the defense lawyer and for the settlement or judgment. Injury verdicts in New York City run high, so look at whether the standard per-occurrence limit is enough for your building.

Read the exclusions too. Policies for apartment buildings often exclude assault and battery, lead paint, or certain dog breeds. We list the exclusions in the proposal so you see them before there’s a claim.

Umbrella / excess

An umbrella sits above the liability policy and adds limit for a large claim. One serious injury in New York can exceed a primary limit. You choose how much to buy, and we check that the umbrella follows the terms of the policy beneath it. We get an umbrella quote on every building we place, including when the lender doesn’t ask for one. You can turn it down, but you’ll have seen the price.

Equipment breakdown

Property policies don’t pay when equipment simply fails. Equipment breakdown does. It applies to the boiler, the elevator, the electrical service and the compressors on the roof, and it pays to repair or replace what failed. Most forms also pay the rent you lose while the equipment is down. If the building has a boiler or an elevator, we recommend buying it. It costs far less than replacing a boiler in January.

Loss of rents

After a fire the rent stops, but the mortgage and the taxes don’t. Loss of rents replaces the rental income while the building is repaired, up to a time limit or a dollar amount. Twelve months of gross rent is the usual starting point. A rebuild in this city can take longer than that once you add permits and rent-stabilized tenants, so we’ll go over a longer period with you.

Flood

No property policy includes flood. If the building is in a FEMA flood zone you need a separate policy, from the National Flood Insurance Program or a private insurer, and the lender will require one in a high-risk zone. Buildings outside the mapped zones flood too. A lot of the water damage in Brooklyn after Ida was on blocks that weren’t mapped. We pull the zone determination for your address and get a price, and you decide whether it’s worth it for your building.

Terrorism (TRIA)

Under the federal Terrorism Risk Insurance Act, insurers must offer terrorism coverage on commercial property and liability policies. You accept it or decline it in writing. Lenders on city buildings usually require it. The charge appears as its own line on the quote.

Admitted or surplus lines?

An admitted insurer is licensed by the New York Department of Financial Services. Its forms and rates are filed with the state, and the New York guaranty fund stands behind its policies if it goes under. A surplus lines insurer isn’t licensed here. It can write the risks the admitted market turns down, on its own forms and pricing, and there’s no guaranty fund behind it.

Many older Brooklyn walk-ups, buildings with claims, and buildings with open violations can only be placed in the surplus lines market. Surplus lines placements carry a 3.6% New York excess line tax and an ELANY stamping fee. Both are passed through to you at cost and shown as separate lines on the quote.