Understanding the ins and outs of certificates of insurance (COI) is key to protecting your business. A COI is a document that serves as proof that a property owner or tenant has the required insurance coverage. In the context of real estate, it verifies that the owner or tenant has liability and property insurance for the property in question at the time the document is provided.
In today’s blog, we take a look at what they are, why they’re important, how to track them and more.
You should always consult with your attorney or insurance agent. But, at the very least, a rental property typically needs the following insurance coverage.
- Landlord’s Insurance: This covers the building and any permanent fixtures. It protects against damages such as fire, theft, and natural disasters.
- Liability Insurance: This covers the property owner against any legal claims made by tenants. It also protects or visitors for injury or property damage.
- Loss of Rent Insurance: This covers the property owner for loss of rental income if the property becomes uninhabitable due to covered damages.
It’s important to note that insurance requirements may vary depending on your jurisdiction. It’s best to consult with a licensed insurance agent to determine the appropriate coverage for your rental property.
Liability insurance protects property owners or tenants from financial losses. Especially when someone gets injured on the property or if the property causes damage to another person’s property. Property insurance, on the other hand, covers damages to the property itself, such as from fire, theft, or natural disasters.
When buying or renting a property, it is important to obtain a certificate of insurance from the owner or tenant. This will ensure that they have the appropriate coverage. This can help protect you from financial losses in the event of an accident or damage to the property.
Tenants often let insurance policies expire or insurance companies cancel them for many reasons. Tracking and keeping your certificate of insurance up to date is crucial. Therefore, it is advisable to check the certificate of insurance regularly to ensure policies are still valid.
STRATAFOLIO enables users to upload copies of their certificates of insurance, securely storing them along with the lease and other important documents. One of the great features of our software is our certificate of insurance alerts, which will automatically alert our tenants, owners, and the insurance company before the policy is set to expire so that it can be renewed.
In summary, a certificate of insurance is a crucial document in real estate transactions as it verifies that the property owner or tenant has the required liability and property insurance coverage, providing protection to all parties involved. It is important to obtain and regularly check the certificate of insurance to ensure that it is valid and up-to-date.
Contact us today to learn more about our COI tracking and all the other features to help you streamline your commercial real estate operations.
