What are the Best Types of Property Insurance for Landlords?

Investment in property is usually a hefty undertaking but it is surprising how property investors do not usually take interest in property insurance. But this should be a priority for any landlord since partial or total damage to property can and does happen. Landlords are also at risk of litigation from different parties. Insurance is very crucial in safeguarding a huge investment. Different properties have different insurance needs. A landlord should be familiar with the different types of property insurance to make informed decisions.

Liability insurance

This insurance coverage protects you against litigation when events happen on your property e.g. a tenant falling down the stairs. It is very useful for commercial buildings, in which controlling the kind of people and business activities is a bit difficult. This type of insurance is always needed.

Hazard and fire insurance

This protects the property against fire and hazards including combustible materials. This type of insurance is always needed.

Flood insurance

This type of insurance is needed for properties in flood designated areas. It is also recommended if your property is in an area that is not designated a flood zone but experiences occasional storms.

Property owners should be aware that flooding caused by external water e.g. storm, and not internal causes e.g. a burst pipe, is not covered by the usual homeowners’ insurance.

Sewer backup insurance

Many insurance companies offer to bundle on this type of insurance on the fire and hazard insurance cover. But it can be taken as a standalone policy and is needed.

Builder’s risk insurance

This insurance type will be needed when renovating a vacant or near-vacant property.

General contractor insurance

This type of insurance is recommended for property owners with a number of properties. It supports licensing as a General Contractor which enables one to repair and renovate premises independently.

Workers’ compensation insurance

This type of insurance is needed by landlords who manage their properties directly and have to employ people directly e.g. property supervisors, receptionists, cleaners and so on. This insurance covers any risks to these employees while going about their normal duties.

Loss of income insurance

This is recommended for landlords who are worried about low occupancy rates. It is not needed for property investors who are holding onto a property for speculation purposes. Some insurance providers offer to bundle this cover with the fire and hazard insurance for an extra cost.

Having property insurance cannot be ignored by any prudent landlord keen on safeguarding his/her investment. Accidents and disasters are never foreseeable.