It is very important that a real estate developer carefully analyze their professional risks to ensure they have proper protection. Real estate development is a multi-faceted process involving a wide range of projects. Some real estate development differs from construction and management, although many developers also build and manage their own projects. A real estate developers often works with various industry professionals, such as contractors, surveyors and inspectors, and this partnering exposure creates unique risks and insurance needs which is why it is so vital to be aware of the types of insurance every real estate developer should consider before beginning a new development project.
Professional Liability Insurance
Professional liability insurance protects usual services and transactions conducted by real estate developers that generally are not covered under a commercial general liability policy. It’s crucial to secure PLI to limit liability regarding errors or omissions committed by a professional on staff while providing their services. Employment Practices Liability (EPL) is another relevant type of professional liability insurance, protecting against lawsuits filed by employees, former employees and potential job candidates in regards to civil rights or discrimination. This policy may also apply to seasonal employees, leased employees and independent contractors.
Environmental Protection
You can fill in coverage gaps that a general liability policy excludes and obtain coverage enhancements tailored to the individual history, operational risk and liability concerns of a specific project with environmental or “pollution liability” insurance. Common exposures only covered under this type of policy include asbestos, mold, lead paint, underground storage tanks and other pollutants. There are also many potentially hazardous operations that are very common for real estate developers to endure. A single release of these pollutants can have financially devastating consequences.
Flood Insurance
Flood insurance coverage can significantly reduce a real estate developer’s exposure to flood damage, as it covers loss for physical damage to buildings and the personal possessions within the building. According to LinkedIn, the real estate developer has property that is located in a flood-prone area it is extremely important to have a contingency plan that protects reconstruction delays and/or extensive underground construction.
Blanket Limit Coverage
A Blanket Insurance Policy (BIP) applies a single coverage amount to all of the properties or exposures. It could cover varying types of property in the same location, the same type of property in varying locations, or varying properties in varying locations. Since this coverage has various applications, it is traditionally offered with significant coverage limits.
Construction Policy
There are different types of construction insurance, but any business that works in or with the field of construction should consider obtaining construction or “builder’s risk” insurance. Even if you hire a general contractor who may carry their own construction policy, the developer and all subcontractors should be named as additional insureds, states the article. This policy can cover damage to your own property and typically insure against accidental loss or damages to a contractor’s work and property during construction and extend coverage to equipment, material and supplies. It’s designed to provide a speedy resolution if a property claim occurs during a construction project and avoid construction delays.
Business Interruption
This policy offers payment for lost rental income if the lost rent is due to covered loss that causes an interruption to business operations. This coverage is important because a tenant can terminate its lease if business is interrupted for an extended period of time, however with this protection, the carrier will continue paying that tenant’s rent until a new lease is established.
About Provident Protection Plus
At Provident Protection Plus, we have served the businesses and residents of New Jersey, New York, and Pennsylvania for more than 65 years. We are a wholly-owned subsidiary of Provident Bank, the region’s premier banking institution, and we are prepared to offer you personal, business, employee benefits, and risk management solutions. To learn more about our coverage options, contact our specialists today at (888) 990-0526.