What Are the Most Common Mixed-Use Property Exposures?
Since mixed-use properties are simply a building with both residential and commercial elements, the most common claims are quite similar to what you’d see in other buildings.
With our mixed-use clients, we frequently see claims for:
- Fire damage
- Slips and falls
- Water damage
- Wind and hail damage
One differentiator for mixed-use buildings is their comparatively larger volume of foot traffic. With both tenants and customers frequenting these spaces, there’s a higher likelihood of any of these exposures resulting in larger or more frequent claims.
Your clients can manage this problem through a smart mix of training and preventative measures focusing on high-traffic areas like hallways, sidewalks, and more.
When Standard Coverage Could Fall Short
Mixed-use buildings pose unique risks because residential and commercial spaces overlap. Here are three situations in which a standard insurance policy could leave property owners exposed:
- Restaurant fire
A kitchen fire in a ground-floor restaurant unit could spread to the apartments above, causing extensive property damage and lost rental income.
- Slip-and-fall in shared areas
Higher foot traffic in lobbies, hallways, and shared entrances increases the chance of injuries. Without tailored general liability insurance, a single claim could create major financial losses.
- Burst pipe, multiple claims
A burst pipe in an upper-floor office could leak into the retail spaces or apartments below it. One incident impacts commercial spaces and residential properties at the same time, creating overlapping claims that a standard insurance policy might not cover.
Specialized mixed-use property insurance helps building owners protect against these overlapping exposures, giving them confidence that both types of risks are covered.
What Does Mixed-Use Property Insurance Cover?
Because mixed-use buildings combine residential and commercial space, owners need an insurance policy that protects both sides of the property. Distinguished’s City Insurance Program provides an all-risk package that includes:
- Commercial property insurance with replacement cost valuation for building damage
- Ordinance or law coverage for:
- Coverage A (Undamaged Portion)— the undamaged portion of a building that must be torn down after a loss
- Coverage B (Demolition Costs)— demolition costs tied to the undamaged portion
- Coverage C (Increased Cost of Construction)— increased construction costs required to meet updated building codes
- Backup of sewers and drains, included up to the building’s total insured value
- Equipment breakdown coverage for essential systems like HVAC or elevators
- Terrorism coverage (TRIA) that covers damages to property after events certified as a terrorist attack by the U.S. Department of the Treasury
- Commercial general liability to protect building owners if tenants, customers, or visitors are injured on-site
- Hired and non-owned auto coverage for liability exposures tied to employee or leased vehicles
- Crime insurance to protect against theft, forgery, or employee dishonesty
- Employee benefits liability protects against errors in administering staff coverage
For owner-occupied residential properties, coverage can also extend to:
- Personal liability insurance coverage for incidents in the owner’s unit
- Personal contents coverage for belongings and physical assets in the owner’s unit
- Additional living expenses if the unit becomes uninhabitable
It’s important to note that our program is designed for buildings that are primarily residential with incidental commercial exposures. Unfortunately, we are not able to cover buildings that are primarily used for commercial purposes.
How Much Does Mixed-Use Property Insurance Cost?
The insurance cost for a mixed-use property depends on factors unique to each building, which means there’s no one-size-fits-all premium. Insurance companies also continue to refine their underwriting standards for these properties, given the overlapping risks of residential and commercial buildings.
However, here is a list of major factors that we consider when determining the price of an insurance policy.
- Building values: How much the property is worth
- Maintenance practices: How well the property is looked after
- Prior losses: The previous claims linked to this property
- Risk management practices: How the property mitigates risks currently
- Commercial occupants: The type of business occupants in the building and the unique exposures they bring
- Owner experience: Whether the building owner has a history of managing their buildings well
If you’re interested in getting a quote for your client’s mixed-use property, you can do so by registering your agency and then submitting the necessary documentation online through our Broker Connect portal. You can expect an insurance quote in 1 or 2 working days.
Why Choose Distinguished for Your Mixed-Use Property Clients?
Partnering with Distinguished means working with an insurance provider that has more than 35 years of experience in the insurance real estate programs. Our City Insurance Program is available in more than 30 major metro areas nationwide and include key differentiators brokers can use to win business:
- Specialized coverage: We offer tailored coverage suitable for mixed-use properties common in cities across America.
- Repair services: We’ve partnered with Sedgwick to provide your clients with a trusted network of contractors for all repairs and renovations.
- Higher coverage limits: Sewer and drain backup is included up to the full building limit, well above the caps typical in the market.
- No building age restrictions: Older properties are eligible when systems have been upgraded, giving brokers more flexibility to place coverage.
- Access to our online portal: Submit business easily through our online portal, so you can get your client quotes back quicker and with less hassle on your part.
- An A-rated carrier: Our coverage is supported by Zurich, one of the nation’s top real estate insurance providers.
- Availability in America’s biggest cities: Our program can help you insure mixed-use buildings across the nation, including in cities like Boston, Chicago, and LA. For a full list of eligible cities, see the FAQs section at the end of this article.
Learn More About Distinguished’s City Insurance Program
If you have mixed-use property clients, chances are you’re working with a ton of other city clients as well. Luckily, Distinguished also insures other kinds of urban buildings, including multi-family properties, landlord properties, and more.
To see everything Distinguished has to offer, check out the resources below:
- City Multi-Family Landlord Insurance Program Page
- City Landlord Insurance Program Page
- Broker’s Guide to City Insurance Program eBook
Additional resources for brokers:
- Express City Insurance Umbrella Program Page
- Landlord Insurance: Costs and Coverages in the City
- Habitational Real Estate Insurance: An Ultimate Guide for Landlords and Brokers
- 3 Reasons Umbrella Insurance for Rental Properties Is Essential
For any further questions, you can reach out to [email protected].
Mixed-Use Property Insurance FAQs
How do I submit business?
Submitting business is as easy as registering your agency (if you’ve not already done so), logging into our online Broker Connect portal, and submitting all the necessary details for your clients.
What is Distinguished’s appetite for mixed-use properties?
Although we do insure mixed-use buildings, our focus is primarily on habitational buildings with incidental commercial exposures. If you have any questions about whether your client would qualify, please reach out to [email protected].
