Insurance for warehouse
- Thread starter danel
- Start date
Yes you need insurance
A family member owned a warehouse in Christchurch. It is now condemned and he has to pay to demolish it.
Call a business insurance broker. Let them know you don't want everything but you do want to consider your options.
Strata insurance is a last-chance, worst-case situation. Body Corporates often estimate the replacement value of the building, but if they are under-insured it is very bad for you in the event of a partial-loss claim.
You also should consider rental loss and any mortgage payments you may need to cover.
The lease may open you up to liability that you cannot pass through to the body corporate.
The main advantage of having your own insurance is that it places an insurance company into the chain of claims when things go wrong. They have their own lawyers. If you are the guy in the middle, the lawyers point to you. Does that make sense?
Point out to the broker that you want coverage for what the Body Corporate doesn't cover. That should limit the premiums significantly.
A family member owned a warehouse in Christchurch. It is now condemned and he has to pay to demolish it.
Call a business insurance broker. Let them know you don't want everything but you do want to consider your options.
Strata insurance is a last-chance, worst-case situation. Body Corporates often estimate the replacement value of the building, but if they are under-insured it is very bad for you in the event of a partial-loss claim.
You also should consider rental loss and any mortgage payments you may need to cover.
The lease may open you up to liability that you cannot pass through to the body corporate.
The main advantage of having your own insurance is that it places an insurance company into the chain of claims when things go wrong. They have their own lawyers. If you are the guy in the middle, the lawyers point to you. Does that make sense?
Point out to the broker that you want coverage for what the Body Corporate doesn't cover. That should limit the premiums significantly.
As part of your lease there should be a stipulation that the tenant has liability insurance etc to cover any risks that fall to the tenant.
The strata insurance should have regular valuation done and this should be discussed at the strata meetings. Generally there is an escalation clause in the insurance policy which keeps ratcheting up the value then every 3-5 years a new valuation (total replacement) is obtained and the value adjusted.
The main aspects excluded from your strata insurance are the units internal fittings that don't constitute the building. This would include things like carpet, blinds and office partition walls. If anything all you would need to insure are these type of items and I am sure that a well written lease could transfer the responsibility for covering these to the tenant.
I am not aware that you can get anything like LL insurance to cover loss of rent.
Cheers
The strata insurance should have regular valuation done and this should be discussed at the strata meetings. Generally there is an escalation clause in the insurance policy which keeps ratcheting up the value then every 3-5 years a new valuation (total replacement) is obtained and the value adjusted.
The main aspects excluded from your strata insurance are the units internal fittings that don't constitute the building. This would include things like carpet, blinds and office partition walls. If anything all you would need to insure are these type of items and I am sure that a well written lease could transfer the responsibility for covering these to the tenant.
I am not aware that you can get anything like LL insurance to cover loss of rent.
Cheers
Nice post handyandy.
We also have strata warehouses, and everything you described is exactly how it is.
You can get policies that roll the risk of 'loss of rent and outgoings' into the other insurances that the Tenant has to take out. Naturally they pay to insure against themselves not being able to pay the Landlord. It's a comfortable life.
We also have strata warehouses, and everything you described is exactly how it is.
You can get policies that roll the risk of 'loss of rent and outgoings' into the other insurances that the Tenant has to take out. Naturally they pay to insure against themselves not being able to pay the Landlord. It's a comfortable life.
You can get policies that roll the risk of 'loss of rent and outgoings' into the other insurances that the Tenant has to take out. Naturally they pay to insure against themselves not being able to pay the Landlord. It's a comfortable life.
That statement alone makes me want to buy a commercial property
Ensure that the lease stipulates that the tenants insurances covers your interest and nominates the owner of the property on the policy.
Plus, always ensure that you hold a current copy. I know it sounds silly, but some owners get the first one and never follow it up after it expires.
Plus, always ensure that you hold a current copy. I know it sounds silly, but some owners get the first one and never follow it up after it expires.
If you have a PM (like in this case), instruct them in writing to confirm and record copies of the Certificate of Currency on or before every anniversary. I'd even go so far as explicitly stating this is a contractual stipulation where non-performance by the PM admits liability for monetary damages in the event of loss. To ensure it is enforceable they'd have to sign this agreement, so you may wish to include it in a review and renewal of the Property Management agreement. PM's like to waive liability or limit it to their fees (i.e a refund). But if they ignore your instructions they should indemnify you.
Set a reminder so you check your PM's performance. If they fail, change managers. You pay them for this stuff.
I'm assuming the PM used a residential lease as the basis of the commercial lease assuming you actually have a lease. Most small commercial leases avoid the expense of a lawyer prepared lease. This is a false economy in the long run.
If you already have a lease that does not cover this stuff, notify your PM in writing that you want these terms included in the next lease.
*
There is Property Owner’s Public Liability that we need to insure on this property. The strata policy public liability section covers third party injury and third party property damage in common areas only. The tenant’s public liability policy will only respond to their own legal liability inside the unit and for their activities.
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There is property owners liability exposure for the landlord, for example, the landlord has responsibility to ensure the premises is properly maintained and
safe to occupy. If a tenant or a third party is injured on the premises because of poor maintenance, this could result in the landlord being sued.
There is Property Owner’s Public Liability that we need to insure on this property. The strata policy public liability section covers third party injury and third party property damage in common areas only. The tenant’s public liability policy will only respond to their own legal liability inside the unit and for their activities.
*
There is property owners liability exposure for the landlord, for example, the landlord has responsibility to ensure the premises is properly maintained and
safe to occupy. If a tenant or a third party is injured on the premises because of poor maintenance, this could result in the landlord being sued.
....get yourself a proper Lease. If that is the case, your current Lease wording is ****.
Agreed. After choosing the commercial property, having a good air tight lease is like gold.
Hey Danel,
A tad of unsolicitored advice.....
These characters 'help' you drive along the road of wealth. They sit in the passengers seats. You sit in the driver's seat. Never let any of them get their hands on the wheel of your vehicle. Everything that I've read so far in this thread indicates you're either in the backseat or asleep in the trailer behind.
If you are going to survive in this fishpond, you'll need to know and understand your Lease wording back to front, sidewards and every which way...enough so that the contortions any and all Tenants twist it you'll still be able to make sense of it.
It is the primary document, the first step, the origin of everything. It's never reviewed second or third...it takes precedence over everything, as everything is dictated by it.
It's unsolicitored cos it's free, it's not advice, and you obviously didn't specifically ask for it.
A tad of unsolicitored advice.....
- do not rely or hide behind your insurance broker.
- do not rely or hide behind your property manager.
- do not rely or hide behind your solicitor.
These characters 'help' you drive along the road of wealth. They sit in the passengers seats. You sit in the driver's seat. Never let any of them get their hands on the wheel of your vehicle. Everything that I've read so far in this thread indicates you're either in the backseat or asleep in the trailer behind.
If you are going to survive in this fishpond, you'll need to know and understand your Lease wording back to front, sidewards and every which way...enough so that the contortions any and all Tenants twist it you'll still be able to make sense of it.
It is the primary document, the first step, the origin of everything. It's never reviewed second or third...it takes precedence over everything, as everything is dictated by it.
It's unsolicitored cos it's free, it's not advice, and you obviously didn't specifically ask for it.
You may shift the risk by having tenant take up insurance- but if 8 y.o. Johnny gets injured due to unsafe premises (hole in the groung or unfenced pit) his lawyer will sue the landowner who must then join the tenant (hopefully with policy and not in liquidation). landlord relying on a policy he has no contractual standing to enforce.
Indemnities are only as good as the person offering it.
Probably wont matter anyway as landowner holds it in a discretionary trust allowing the *wooshka* disappearing trick.
Landlords Insurance Policy
Having a landlord's insurance policy is for peace of mind.
Actually having your own insurance policy in any transaction is for peace-of-mind.
It is up to you to decide if it's "too much".
Historically I don't insure a strata unit until the sale settles and I become the legal owner. I rely on the body corporate insurance and the vendors insurance. For me that risk management has been enough. But I'm thinking of changing that.
Having your own policy means you aren't the only uninsured bunny in the hutch. When something goes wrong, lawyers look around for the sucker to front the bills. If you can't spot the sucker at the poker table, that means it's you.
If your lease includes outgoings it may include insurances.
It's good to have trusts and structures, indemnities and warranties. But those are for scorched earth scenarios. It's the $20K claims for tripping on a crack that you want to avoid.
Having a landlord's insurance policy is for peace of mind.
Actually having your own insurance policy in any transaction is for peace-of-mind.
It is up to you to decide if it's "too much".
Historically I don't insure a strata unit until the sale settles and I become the legal owner. I rely on the body corporate insurance and the vendors insurance. For me that risk management has been enough. But I'm thinking of changing that.
Having your own policy means you aren't the only uninsured bunny in the hutch. When something goes wrong, lawyers look around for the sucker to front the bills. If you can't spot the sucker at the poker table, that means it's you.
If your lease includes outgoings it may include insurances.
It's good to have trusts and structures, indemnities and warranties. But those are for scorched earth scenarios. It's the $20K claims for tripping on a crack that you want to avoid.
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