A certificate of insurance 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 is a document that verifies that the owner or tenant has liability insurance and property insurance for the property in question.
In today’s blog, we take a look at what they are, why they’re important, how to track them and more.
A rental property typically requires the following insurance coverage, though we are not licensed insurance agents or attorneys so we encourage you to speak with the appropriate party to ensure accuracy:
- 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 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 the jurisdiction, so it’s best to consult with a licensed insurance agent to determine the appropriate coverage for your rental property.
Liability insurance protects the property owner or tenant from financial losses if someone is 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 to 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.
It is also important to note that the certificate of insurance should be kept up to date, as insurance policies can expire or be cancelled. Therefore, it is advisable to check the certificate of insurance regularly to ensure that it is still valid.
STRATAFOLIO allows our users to upload copies of their certificates of insurance, so that they are safely secured 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.