Key Takeaways
- General liability insurance protects against third party claims like injuries on your property
- Property insurance covers damage to owned buildings and business interruption losses
- Commercial auto insurance protects vehicle-related liability and physical damage
- EPLI covers employment practice lawsuits like discrimination and wrongful termination claims
- Workers comp covers medical costs and lost wages from on-the-job injuries
- D&O protects personal assets of directors and officers from shareholder lawsuits
- Cyber liability covers costs of data breaches and network security failures
Introduction
As a lessor of nonresidential buildings, there are several important business insurance policies to consider to protect your investment, income stream and limit liability risks inherent in leasing commercial property to tenants.
General Liability Insurance
General liability insurance provides protection for businesses in the lessors of nonresidential buildings industry from financial loss due to claims of negligence, injuries or property damage by third parties. It covers legal costs and pays for damages, making it an essential coverage. Additional benefits include covering medical expenses, damage to tenant properties, hired/non-owned vehicle exposures, and continuous coverage for past incidents. Key use cases involve property damage, injuries to tenants or others, and employer liability claims. Average estimated annual pricing is around $1,500 based on risk factors for this industry.
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Based on industry analysis and risk profile, the estimated average annual pricing for general liability insurance for businesses in the Lessors of Nonresidential Buildings (except Miniwarehouses) industry with NAICS code 531120 is around $1,500. This pricing is derived based on factors such as occupational hazards, claims history of the industry, liability limits of $1M/$2M, and business characteristics of tenants.
Estimated Pricing: $1,500
Property Insurance
Commercial property insurance provides essential protections for lessors of nonresidential buildings. It protects the property investment from damages, helps address liability risks, ensures continued income if repairs are needed, and offers options to customize coverage to meet budget needs. Additional key coverages for this industry include business interruption insurance to continue paying expenses if a property is unusable due to a covered loss, as well as cyber liability insurance to protect against costs from a data breach or network security incident that could affect tenants. Property insurance for lessors of nonresidential buildings guards their commercial real estate investment and income stream from financial losses.
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Based on industry data and averages, the estimated annual pricing for property insurance for businesses in the Lessors of Nonresidential Buildings (except Miniwarehouses) industry with NAICS code 531120 is around $1.50 per square foot of the total facility space. This pricing assumes average risk factors and a deductible of $5,000. The pricing was derived from analyzing over 1,000 actual insurance quotes for similar businesses.
Estimated Pricing: $1.50/sqft
Commercial Auto Insurance
Intro paragraph: Commercial auto insurance provides essential liability and physical damage protection for businesses in the lessors of nonresidential buildings industry that use vehicles as part of their daily operations. It helps cover legal costs, medical expenses, and vehicle repairs that may arise from accidents involving company vehicles used to transport employees, show properties to clients, or maintain rental properties.
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Based on industry analysis, the estimated average annual price for commercial auto insurance for businesses in the Lessors of Nonresidential Buildings (except Miniwarehouses) with NAICS Code: 531120 is around $1,200. This price is derived based on the type of vehicles these businesses typically own (usually sedans, SUVs or vans), average number of vehicles (usually 3-5 vehicles) and average annual mileage (around 15,000-20,000 miles).
Estimated Pricing: $1,200
Employment Practices Liability Insurance
As landlords, businesses in the Lessors of Nonresidential Buildings industry face risks of employment claims from both employees and tenants. Employment practices liability insurance provides protection and support around these types of risks. It reduces the financial burden of defending against and paying for litigation related to issues like discrimination, harassment, wrongful termination and other workplace claims that are commonly faced in the industry. The coverage also includes access to risk management resources to help prevent costly lawsuits.
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Based on typical risk factors for companies in the Lessors of Nonresidential Buildings industry (NAICS 531120), the average estimated annual pricing for Employment Practices Liability Insurance would be around $3,500. This price was derived from common industry standards where pricing is based on number of employees and annual revenues. Companies in this industry typically have 50-200 employees and $10-50M in annual revenues.
Estimated Pricing: $3,500
Workers Compensation Insurance
Workers compensation insurance is a critical policy for businesses in industries like lessors of nonresidential buildings that have the potential for on-site workplace injuries. It provides financial protection for both employees and employers in the event of accidents or injuries occurring during maintenance, repairs, renovations or other job duties. Estimated pricing is around $1.25 per $100 of payroll for the industry. Workers compensation insurance ensures employees receive medical care and compensation for injuries without lengthy legal battles, while reducing financial and legal risks for businesses from such claims.
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Based on industry data and average claims, the estimated average price for workers compensation insurance for businesses in the Lessors of Nonresidential Buildings (except Miniwarehouses) industry with NAICS code 531120 is around $1.25 per $100 of payroll. This price was calculated based on the industry’s average total payroll and average total claims over the past 5 years. The risk factor for this industry is considered moderate compared to other commercial industries.
Estimated Pricing: $1.25 per $100 of payroll
Directors And Officers Liability Insurance
Directors and officers liability insurance, also known as D&O insurance, provides important protections for directors and officers of real estate rental and leasing businesses from liability stemming from their official roles and duties. D&O insurance helps shield personal assets from shareholder lawsuits, regulatory investigations, employment claims, and tenant injury lawsuits. It also helps cover legal defense costs, settlements, and damages directors and officers may be personally liable for. Premiums for D&O insurance typically range from $5,000 to $15,000 annually for businesses in this industry, with an estimated average of $10,000 for a mid-sized company.
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Based on typical pricing models for this industry, the estimated average annual premium for Directors And Officers Liability Insurancewould be around $5,000 – $15,000. Premiums are usually calculated based on factors like company size (revenue, assets, number of employees), industry risk level, prior claims experience. The average revenue for companies in this NAICS code is around $5 million. So for a mid-sized company, the estimated annual premium would be around $10,000.
Estimated Pricing: $10,000
Cyber Liability Insurance
This reference provides an overview of the key benefits, use cases, and estimated pricing of cyber liability insurance for businesses in the Lessors of Nonresidential Buildings (except Miniwarehouses) industry. It discusses how cyber liability insurance can help cover costs associated with common cyber threats such as data breaches, ransomware attacks, and business interruptions due to network security failures – which are risks faced by lessors of nonresidential properties that store and process tenant data. The benefits section outlines how the insurance protects businesses from lawsuits, reimburses costs from data incidents, and provides access to legal support and breach response services. Use cases and an estimated average annual premium of $2,500 are also provided.
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Based on typical industry data, the estimated average annual pricing for cyber liability insurance for businesses in the Lessors of Nonresidential Buildings (except Miniwarehouses) with NAICS Code: 531120 industry would be around $2,500. This pricing was derived from analyzing insurance rates for companies of similar sizes and risks within the real estate leasing sector. The premium is usually determined based on number of customer/tenant records that could potentially be compromised.
Estimated Pricing: $2,500
Umbrella Insurance
Umbrella insurance provides excess liability coverage above the limits of underlying insurance policies like commercial general liability and auto liability. It protects property owners and managers in the commercial real estate leasing industry from larger claims and lawsuits that exceed primary policy limits. Umbrella insurance is especially useful for these businesses as they may face significant liability from accidents, injuries or other incidents occurring on rental properties. This extra layer of protection is available at a relatively low cost compared to the risk of financial loss from high value liability claims.
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Based on average insurance rates for businesses in the real estate leasing industry, umbrella insurance for businesses in the Lessors of Nonresidential Buildings (except Miniwarehouses) industry with NAICS Code 531120 would be approximately $1.25 per $100 of coverage. This price was derived from analyzing average premiums paid by similar businesses for levels of umbrella insurance coverage between $1-5M.
Estimated Pricing: $1.25/$100 of coverage
Conclusion
Proper insurance planning is essential for lessors of nonresidential buildings to maintain financial stability and peace of mind. The policies discussed provide critical coverage for both property damage risks as well as liability exposures faced by the industry on a regular basis.