Owners of small buildings in New York City face a number of insurance challenges. But for owners of mixed-use buildings – those properties with commercial space on the ground floor and residential units above – commercial building insurance can get tricky.
Common throughout the five boroughs, these properties raise a number of special considerations when looking for mixed-use building insurance.
General insurance guidelines for mixed-use buildings
First and foremost, building owners and property managers should require each commercial tenant to carry a liability policy of at least $1 million. In addition, this policy should name the landlord or building owner an additional insured. Building owners should not be held responsible for tenants’ customers.
In addition, the insurance carrier for commercial tenants should be rated B+ or better on the A.M. Best scale, which indicates an insurance company with a good ability to meet its financial obligations. Other insurance rating groups use different classifications, but the key is to find a carrier with a “good” outlook.
In addition, building owners need to consider special requirements that depend upon the specific nature of occupancy:
- For example, restaurants that serve liquor also need to have a liquor liability policy of at least $1 million.
- Tenants that involve children, such as daycare centers and tutoring facilities, require special licenses and insurance, as well as two means of egress.
- Laundromats require inspections of water hoses to prevent leaks.
These examples are only some of the considerations for building owners with commercial tenants. You may also want to read our Special Considerations for Mixed-Use Property post.
Getting the best insurance for mixed-use buildings
To help small building owners in New York City get the right policy for their mixed-use building, City Building Owners Insurance goes through the following process:
- Review of exposures for different tenant types, including types of insurance proof associated with each
- Discussion of risk transfer
- Review of certificates of insurance
In addition, we help building owners look at their property with the goal of lowering their overall risk profile. This process allows us to find the right policy at the best price for each building.