Real Estate Industry Solutions
Real estate businesses face N number of risks, from property damage and injuries on the premises to lawsuits and errors and omissions. So, at Icare Insurance policy, we provide a financial safety net for these unexpected events, helping businesses weather storms and stay afloat. Fire, theft, vandalism, and natural disasters can wreak havoc on a property owner’s finances. Our property insurance helps cover the cost of repairs or replacements, ensuring businesses are still footing the entire bill for rebuilding or restoring damaged property. If someone gets injured on a property owned or managed by a real estate business, they could file a lawsuit. Icare General liability insurance covers legal costs and settlements associated with such claims, protecting businesses from financial ruin.
Key Risks
While offering potentially high returns, the real estate industry carries inherent risks that can lead to significant financial losses. Here are five key risks that highlight the importance of insurance for real estate businesses:
- Market Fluctuations
Real estate values are susceptible to economic downturns, interest rate hikes, and demographic shifts. These elements may cause a drop in real estate prices, rental revenue, and occupancy rates, affecting an investment’s cash flow and profitability.
- Property Damage
Properties are vulnerable to various natural disasters, such as fire, earthquakes, and floods. These occurrences can potentially harm structures, necessitating costly repairs or replacements seriously. Property owners are protected against such monetary obligations by insurance.
- Liability Risks
Property managers and landlords are responsible for any mishaps or injuries that occur on their property. Tenant injuries, slip-and-fall accidents, or faulty building conditions can lead to lawsuits and significant financial settlements. Liability insurance protects real estate businesses from such unforeseen events.
- Environmental Issues
Real estate projects may uncover hidden ecological hazards like asbestos or lead contamination during construction or renovation. Cleaning these hazardous materials can be costly, and insurance helps mitigate these financial risks.
- Rental Issues
Rental delinquencies, vacancies, and problematic tenants can disrupt an investor’s cash flow. Eviction proceedings and repairs due to tenant damage can be time-consuming and expensive. Rent guarantee insurance can help cover losses from unpaid rent, while property insurance can protect against tenant-related damages.
- Macroeconomic Fluctuations
Interest rates, inflation, and government regulations can significantly impact the real estate market. Rising interest rates, for example, can make property purchases less attractive, affecting demand and property values. Although insurance cannot stop these changes, it can provide a safety net for finances in a market crisis.
- Tenant Issues
Managing tenants can be challenging. Unforeseen circumstances like tenant turnover, rent disputes, or property damage can lead to lost income and unexpected expenses. Eviction proceedings and repairs due to tenant neglect can be time-consuming and costly. Eviction insurance and property insurance can help mitigate these risks.
- Vacancy Rates
Vacancy periods can significantly impact a real estate investor’s cash flow. High vacancies can make it difficult to cover mortgage payments, property taxes, and maintenance costs. While insurance cannot fill vacancies, rent guarantee insurance can provide some financial protection during vacancy periods.
Real estate businesses can safeguard themselves from these potential pitfalls and ensure financial stability by acquiring comprehensive insurance coverage. By reducing risks and providing a financial safety net, insurance helps firms run more comfortably
Product
1. Contractors All risk insurance
Contractors all-risk (CAR) insurance is a comprehensive insurance policy designed to protect against physical loss or damage to property and third-party liability claims arising during a construction project.
What does it cover ?
- Physical loss
- damage to the insured property.
- Buildings under construction
- Building materials
- Machinery and equipment
- Temporary structures on-site
- Third-party liability claims, including
- Bodily injury
- Property damage
What it doesn’t cover?
- Standard exclusions include floods, earthquakes, and wear and tear.
- Intentional damage by the insured is also not covered.
Additional coverage available for an extra premium:
- Additional coverage for perils like windstorms, hail, and earthquakes may be available depending on the specific policy.
- Coverage for business interruption may also be available.
2. Directors & Officers Insurance
Directors and Officers (D&O) insurance is a liability insurance that protects real estate directors and officers from personal financial damages if they are sued for suspected misconduct while acting in their official capacity.
What does it cover ?
- Legal defence costs: D&O insurance covers the legal fees and other expenses incurred by directors and officers in defending themselves against lawsuits.
- Settlements and judgments: If a director or officer is found liable, the D&O policy can help cover the cost of settlements and court judgments.
What it doesn’t cover ?
- Intentional wrongdoing: D&O insurance does not cover claims arising from fraud, willful misconduct, or criminal activity.
- Employment disputes: Lawsuits between the company and its employees are typically not covered by D&O insurance.
Additional coverage available for an extra premium:
Insurance for employment practices: This can cover allegations of discrimination, harassment, and wrongful termination.
3. Group Health Insurance
Group health insurance is an employer-sponsored health plan that provides medical coverage to real estate employees and their dependents.
What does it cover?
Plans for group health insurance usually pay for a range of medical costs, such as:
- Hospitalisation
- Physician visits
- Specialist care
- Lab tests
- Prescription drugs
What it doesn’t cover?
- . Common exclusions include:
- Dental care
- Vision care
- Long-term care
- Cosmetic surgery
Additional coverage available for an extra premium:
- Depending on the plan design, employees can add optional coverage for dental, vision, and other benefits by paying an additional premium.
4. Group Personal Accident
Group personal accident (GPA) insurance protects a group of individuals, usually real estate employees, in the case of an accident.
What does it cover ?
- Accidental death: The policy pays a benefit to the beneficiary (usually a family member) if the insured dies due to an accident.
- Permanent disability: The policy pays a benefit to the insured if they are permanently disabled as a result of an accident.
- Temporary disability: Some policies may also provide benefits for temporary disability caused by an accident, which can help offset lost income during recovery.
What it doesn’t cover?
- GPA insurance typically excludes accidents caused by intentional injury, war, or certain high-risk activities.
- Pre-existing medical conditions may also be excluded.
Additional coverage available for an extra premium:
- Additional coverage for certain benefits, such as funeral or medical expenditures, may be available under some plans.
5. Group Term Life Insurance
Group term life insurance is a type of life insurance that companies and trade groups frequently offer as a bonus. In the event of the insured’s death, the policy pays a death benefit to the beneficiary indicated on the policy.
What does it cover ?
- Provides a death benefit to the beneficiary named in the policy in the event of the insured’s death.
What it doesn’t cover?
- Death by suicide within the first two years of the policy.
- War or acts of war.
- Travel to some high-risk regions.
Additional coverage available for an extra premium:
- Accidental death benefit
- Waiver of premium rider
6. Contractor Plant & Machinery
Contractor’s plant and machinery insurance is specially designed to safeguard real estate contractors against financial losses caused by equipment damage or loss.
What it covers?
- Physical damage to equipment due to fire, theft, vandalism, accidents, and other covered perils.
- Coverage while the equipment is in use, at rest, or undergoing maintenance.
What it typically doesn’t cover:
- Wear and tear
- Faulty machinery
- Damage caused by the insured
Additional coverage available for an extra premium:
- Third-party responsibility for property damage and personal harm.
- Coverage for specific perils like earthquakes or floods.
7. Commercial General Liability
Commercial general liability (CGL) insurance protects real estate businesses from financial losses (as a result of) third-party claims like slip-and-fall injuries, property damage, and even advertising injuries. It’s essential coverage for any real estate business dealing with the public.
What does it cover?
- offers financial protection to real estate companies against losses brought on by property damage, personal injury to third parties, and advertising harm.
- It covers incidents on the property, during business operations, or because of negligence by the business or its employees.
What it typically doesn’t cover?
- Intentional acts by the insured
- Pollution
- Workers’ compensation claims
Additional coverage available for an extra premium:
- Products and completed operations liability
- Business interruption
8. Workman Compensation Policy
Worker’s compensation insurance for real estate businesses protects employees in case of work-related injuries or illnesses. Here’s a breakdown of its coverage:
What it covers?
- Medical expenses for work-related injuries or illnesses
- Lost wages due to a work-related injury or illness
- Rehabilitation costs to help an employee return to work
- Death benefits for the dependents of an employee who dies from a work-related injury or illness
What it doesn’t cover:
- Injuries caused by intoxication or horseplay
- Intentional injuries
- Injuries that occur outside of the scope of employment
Additional coverage available:
- Employer liability insurance to cover legal costs if an employee sues for damages
Summary: Real estate businesses face a variety of risks, from property damage and injuries on the premises to lawsuits and errors and omissions. Icare Insurance provides a variety of insurance products to help real estate businesses manage these risks, including property insurance, general liability insurance, and workers’ compensation insurance. Icare also offers insurance products for contractors, directors and officers, and employees.
