Commercial Condo Insurance: Cost & Quotes From $20/mo

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Commercial Condo Insurance | A Brief Overview

When you are a business or property owner, or a landlord with at least one commercial condominium unit, getting the right commercial condo insurance is crucial. Insuring a condo unit can sometimes get complicated, particularly if you own just one unit in a building. In basic terms, commercial condo insurance helps safeguard the structure you own or rent. Losses from a variety of sources are covered, including:

• Fire Incidents

• Robbery/Housebreaking

• Theft

• Lightning

• Wind

There are usually multiple interests when it comes to ownership, liability, and the upkeep responsibility of different parts of the building. There can be confusion about who is responsible for maintenance, security, and insurance, and this might be even more confusing with commercial condos, as opposed to residential condos. 

The common question among condo unit renters or owners is, “do we need to have insurance for our condo unit if the owners of the main building already have insurance?” The answer is generally yes, even if you rent the unit instead of owning it. You might start by exploring general commercial property insurance, but you can also explore specialized commercial condo endorsement options that are offered by some insurance companies. 

This guide will take you through topics such as: 

• Who needs to have commercial condo insurance? 

• What coverage does commercial condo unit owner's insurance provide? 

• What type of insurance do condo associations need? 

• How much does commercial condo insurance cost? 

• Which are the best insurance companies for commercial condo insurance? 

When you're searching for the best commercial condo insurance policy, be sure to compare rates to find the right price. A quote comparison will allow you to look at the benefits and drawbacks of different insurance providers so you can pick the right one.

What Does a Commercial Condo Insurance Cover?

There are different ways commercial condo insurance can protect both condo owners and condo corporations. One of the reasons condo owners should have insurance is to help pay for costs to the building if the condo corporation lacks sufficient funds and insurance. Condominium unit owners' contingent is used in a situation such as the building being damaged by fire, where the corporation is unable to pay for the repairs. 

Another way owners can benefit from a commercial condominium insurance coverage is through unit improvements and betterments coverage. This provides coverage for improvements or alterations outside of the standard unit definition. It helps to protect any improvements you have made, as well as any previous owners might have made. 

Loss assessment coverage can also provide coverage for any loss or damage assessed back to the unit owner. For example, it could cover costs if someone is injured and the condo association's insurance doesn't cover all of the associated costs. 

Condo owners can also take out general business property insurance for their units. This can be used to protect their property, including their part of the building and its contents. Liability insurance extends this protection, helping to cover the cost of things like people getting injured on your business premises. 

Here’s a quick summary of what commercial condo insurance can cover based on a person’s affiliation:

1. Association. The master policy of the association includes its common spaces along with other property as specified by the bylaws and the liabilities of the association.

2. Unit Owner. The policy for the unit owner covers both their responsibility and the share of the unit that is allotted by the bylaws.

3. Tenant. The tenant's insurance policy protects their possessions as well as any liabilities they may incur due to their actions. According to a hold harmless and indemnification clause, a lease may also compel the tenant to carry insurance for the unit owner's liability as well as the tenant's property and betterments.

Take this as an example of one of the many benefits unit owners can get out of insuring their condo units. 

Condo Association Insurance

In addition to condo unit owners availing of commercial insurance policies, it's essential for condo associations to have insurance. Commercial condo association insurance covers all of the public areas and shared amenities of the condo building. It can provide coverage for building protection and liability. However, even if your condo association has its own insurance (which will be paid for by your service charges), it is still advisable to have insurance as an individual owner of a commercial condo unit. 

Which is Not Covered Under a Commercial Condo Insurance?

Commercial condo insurance policies are very clear about which incidents are covered and which are not, much like any other insurance policy. Unfortunately, property owners or tenants who may not grasp the extremely complex terminology used in their insurance contracts may find it quite challenging to understand coverage under these policies. This frequently confuses them about what is not covered by insurance.

The following are a few of the most typical claims that commercial condo insurance does not cover:

Damage Resulting from Maintenance Issues

In general, any harm caused to the property that results from improper maintenance is not covered. A commercial condo insurance policy often excludes coverage for damage caused by termites and other insects, corrosion, rot, mold, and normal wear and tear. Furthermore, harm brought on by smoke from commercial or agricultural machinery might not be covered.

Damage from Earthquakes 

Most commercial condo policies don't cover damage to property brought on by natural disasters like earthquakes, mudflows, and sinkholes. However, coverage can be obtained by acquiring an earthquake policy extension especially if the building is situated in a region where these occurrences are frequent.

Intentional Harm to Property

A business property that was damaged on purpose might not be covered by commercial condo insurance. For instance, if a drunk guest purposely breaks the door or windows of the unit, the insurance company won’t provide any coverage for that incident. 

Damage From Flood

While commercial property insurance policies usually include coverage for water damage, they typically do not include protection for flooding incidents. Thus, policyholders ought to procure a separate flood insurance policy to make sure their property is completely secured against flooding damage. This is especially true for condominiums and business properties along the coast, which are more susceptible to flooding or hurricane-related damage.

Commercial Condo Insurance Cost

The cost of commercial condo insurance coverage will depend on whether you are insuring a condo building as an association or a single unit as an individual owner.

In addition, the worth of all of your company's assets, including your building, will play a significant role in determining how much you'll pay for commercial condo insurance. Other risk-related indicators used to calculate your premium include:

• Vicinity-Are storms and other natural disasters common in the area?

• Building Construction-Is your structure made of fire-resistant materials? Does it have new or improved plumbing, HVAC, and electrical wiring?

• Occupancy-What sector do you work in? In general, a real estate office poses less danger than an eatery or service shop.

• Protection From Theft and Fire-How distant are the closest fire station and fire hydrant? Does your building have a sprinkler system and/or fire alarm?

Moreover, many condo associations will purchase a business owner policy, which combines building insurance and liability insurance. This can be a good choice for business owners who own or rent condo units too, helping you to save money by bundling two important types of insurance together. Take a look at some average costs for these types of insurance:

Of course, the actual cost of the insurance for your condo building or unit will depend on several factors. It can be influenced by the size of the property you need to insure, how much coverage you take out, and the location. There are always ways to save money too, including looking for discounts from insurance companies.

To give a quick comparison based on cost, here is the average monthly fee of the top insurance companies in the US in terms of general liability, commercial property, and business owners’ insurance policies: