All Forum Posts by: Michael Pepe

What were your 20k of losses? Obviously coverage always depends on the language of your policy, but if your policy covers loss of income/loss of rents, and if you can show you weren't able to fill the unit because of the damage/repair, and that it otherwise would have been occupied, you may have a claim for loss of rents.

The term "wrap up" insurance generally refers to an Owner or Contractor Controlled Insurance Program that insures the Owner, Contractor, and subs for liability on that particular project. It is typically only available for very large projects (30+ milllion).

But you should seriously consider a general liability insurance policy to protect you from claims of property damage post-construction. Very generally speaking, liability insurance does not cover defects in construction (i.e. shoddy work), but in certain circumstances will cover property damage that results from that work. For example, if your roofing subcontractor did not properly install the weatherproofing membrane under the roof, leading to leaks, which damage the walls and floors, a liability policy would not cover the cost of repairing the roof, but would typically cover the damage to the walls and floors.

While, you may be able to limit liability through through the contract terms, and an "as is" clause, (and I would consult with a lawyer in your area who knows what is allowable in your jurisdiction), that is not a substitute for a good liability policy. This is because you can never prevent someone from suing you, and even if you've adequately limited your liability, you'll need to pay for a defense. In addition to indemnifying you for the liability you may have a general liability policy will pay a lawyer to defend you from a claim that may be covered.

@Joseph Gambino Creating an LLC and buying insurance are accomplishing two different things. Insurance does not limit liability, It just shifts the responsilIty to pay for that liability to the insurer. When you create an LLC you are creating a separate legal entity. The LLC will have liability for its actions and omissions, but you cannot be held personally liable for the LLCs acts or omissions (except in certain circumstances).

@Lynne MacFarlane One of the insurance agents/brokers on here can better respond as to what products are available, and in your area.  

But from a coverage perspective, you want to make sure that you have coverage for damage to your property during construction (whether by fire, flood, construction accident, etc). Builders Risk insurance is necessary when your first party coverage excludes damage to your property when your property is undergoing construction,  which is the case in many commercial property policies. 

If your dwelling/landlord policy covers first party damages even when the damage occurs during renovation/construction, you probably don't need a separate builders' risk policy.

The other component to consider is coverage for Loss of Rents, Loss of Business Income, and Soft Costs resulting from delays in construction that result from a covered loss. Ask whether your landlord policy includes coverage for these losses, and if not, what the increase in premium would be.

In addition to your first-party property insurance and your own liability insurance, make sure your contractors and subcontractors have solid liability insurance, and include you as an additional insured on their liability policies.

Talk to your agent about the correct amounts, but you should also consider requiring the tenant to add you (or your LLC if that's the owner of the property) as an additional insured on their policy for bodily injury or property damage arising out of their use of the property. This means that if you get sued by someone is injured in their apartment, the tenants insurance company will have to defend you and pay before yours does.

Its possible their policy may already provide for this, but only if you require it in your contract, so it's important to require it.

Sounds like a good idea. I've never invested in a Note, but am interested to learn more about it.  

If the contractor wants to get paid soon, he should make time.

Kidding aside, you can you find out what questions the adjuster has, and get the info yourself from the contractor? Or schedule a conference call with both parties so you can bang it all out at once?

Or you can pay him, and continue your claim to get reimbursed. In all fairness to the contractor, he did the work and is entitled to be paid, regardless of whether you have insurance coverage for the damage.

What happened to cause the claim? Why would insurance cover HVAC repair?

Holding title to property in an LLC, and purchasing insurance are accomplishing two different things, although both aimed at reducing liability exposure.

By placing title in an LLC, you are actually limiting your personal liability for any loss that may arise out of the property. When the LLC is the Owner of the property, the LLC would be liable for the loss and you would not (in most instances).

Whether and how you insure that liability (whether yours, or the LLC's) is a different question. Keep in mind that no insurance covers everything.

I think what some people do is decide to purchase a solid personal umbrella liability policy (with broader coverage) that will cover losses arising out of the property. This does not limit your personal liability at all, just limits your exposure because you are insuring the liability.

I’m not exactly sure what you are asking. Did you get the project completed for less than the amount you received from the insurer or do you want to claim more money from the insurer to cover the cost of the repairs?

Be careful with adding the LLC as an Additional Insured. The coverage afforded to an Additional Insured is not always as broad as the coverage afforded to a Named Insured. The Person or entity that owns the property should be the Named Insured.