Real Estate Umbrella Insurance: A Primer for Brokers
In 2020, the US experienced around 380,000 fires in residential buildings, including homes, multi-family homes, and apartments. Each one of those incidents could be grounds for litigation that cost property owners millions in damages. That’s why it’s important companies have robust and comprehensive insurance policies protecting them from fire and life safety suits, as well as other common liability issues faced by property owners.
Real estate umbrella insurance offers high-limit liability coverage to offices, warehouses, retail stores, apartments/rentals, and more to help cover the costs of expensive lawsuits. By understanding what real estate umbrella insurance is, how it works, and who it can help, you can better sell this solution to clients looking for protection in today’s litigious environment.
How Do Real Estate Umbrellas Work?
Real estate umbrella insurance is a secondary liability insurance policy that acts as a safety net if your client’s primary insurance is maxed out. The umbrella kicks in when your client needs additional liability coverage that exceeds their commercial GL policy. It covers the difference between their GL maximum and the overall legal bill they owe, up to the limit of the umbrella.
For instance, your client’s retail outlet could currently have a primary liability policy with a maximum occurrence limit of $1 million. If a passer-by slipped and fell outside their store and successfully sued for $30 million, your client would need to come up with the extra $29 million. A $30M umbrella would be able to help cover these costs.
Who Is Real Estate Umbrella Insurance Designed For?
Real estate umbrella insurance is perfect for clients that run the gamut from residential to commercial. Potential candidates for this umbrella include:
- Apartment buildings
- Condominium buildings
- Offices
- Retail outlets
- Warehouses
Distinguished’s Real Estate Umbrella is particularly good for Class A buildings and new builds because we have experienced underwriters that understand this industry better than most. Using their expertise, we can ensure that your clients will get policies that reflect the particular risks and exposures that their properties face.
What Coverage Features Should an Umbrella Include?
When selling real estate umbrella policies, one area you need to pay close attention to is the coverage features. Each policy will include different coverage features, some of which are absolutely crucial for property owners. These include:
- Broad Named Insured Endorsement
- Crisis Response Coverage
- No Assault and Battery Exclusion
It’s also integral that the umbrella policy includes follow-form coverages in all the areas most important to your client. For instance, if company employees use their personal vehicles for business reasons, you’d want the umbrella policy to include auto liability follow-form coverage.
What Does It Protect Against?
Real estate umbrella insurance increases coverage limits for most liability expenses and exposures a business is likely to face. Here are the top three most commonly encountered issues it helps with:
- Premises Liability: These are cases where someone is hurt or their property is damaged due to negligence on your client’s part. The most common instances of this are slip-and-falls on company property due to wet or icy floors. However, even property owners who don’t deal with the public can face these kinds of lawsuits. In 2006, two men were awarded $24.2 million after being electrocuted while they were trespassing in a rail yard.
- Frivolous Litigation: Regardless of the many honest people in this country, there are still those who see lawsuits as just another way to make money or push an agenda. Even if these cases brought against you are without merit, the costs of fighting them quickly add up. Umbrella coverage would help pay for court costs when your primary insurance runs out.
- Unexpected Events: Sometimes, no amount of planning, training, or precautionary measures can save a property owner from the unexpected. Occurrences like slips and falls, pool drownings, and fires can all happen at any time. In these cases, umbrella insurance is there to help with any ensuing lawsuits that result from these unforeseen events.
How Much Does Real Estate Umbrella Insurance Cost?
Generally, real estate insurance should cost only a couple of dollars per unit per million dollars of coverage. However, every case is a little different and would require an expert to look at the details to get you and your client an accurate estimate.
When considering premiums for Distinguished’s Real Estate Umbrella insurance, we look at things like:
- Exposure type
- Jurisdiction or territory
- Loss history
- Safety protocols and training
At Distinguished, we get most quotes back to you in three to five days. Get the process started by registering your agency and submitting business with our Application Form.
Brokers that are looking for policies with less than $10 million in coverage should consider our Express Real Estate Umbrella Insurance. This program offers smaller limits but can be applied for online with nearly immediate turn-around times on quotes.
How Our Umbrella Policies Help Win Accounts
Distinguished has been a major player in the commercial umbrella insurance and real estate umbrella industry for longer than nearly anyone in the US. We’ve remained an industry leader because we offer a product that helps brokers win and maintain high-value accounts. We do this in three ways:
- High limits: Large accounts often require large policies. That’s why we offer policies up to $140 million. That way, you won’t lose business because you can’t get your clients policies that match their needs.
- Experience: It requires a lot of knowledge to get your clients the insurance they need. Our underwriters have been insuring real estate for a long time, so they know what questions to ask and what needs to be considered to get your client a great policy at a fair price.
- Competitive Price: Our premiums are highly competitive in this market, always offering great value, regardless of the size of your client’s account.
Learn More About Distinguished’s Real Estate Umbrella
Get started with Distinguished by making sure your agency is registered with us and that you’ve created a personal login. Once that’s all done, you’ll be able to submit business for any of our high-limit umbrella and insurance policies — including our Real Estate Umbrella.
To submit business for our Real Estate Umbrella, download and fill in our Application Form, then submit it to one of our Sales Executives. To complete the application, you’ll need five years of currently valued loss runs, the application form, a UL quote, and an SOV with COPE.
To learn more about our Real Estate Umbrella, check out the resources below:
Distinguished’s Real Estate Umbrella FAQs
Is this program nationwide and on admitted paper?
The Real Estate Umbrella is offered in all 50 states. It is also on admitted paper in every state except for Louisiana.
What is not eligible for the Real Estate Umbrella?
We don’t insure any locations outside the US. As well, the following are not eligible for this policy:
- Mobile Homes and Trailer Parks
- Senior Housing
- College/School-Affiliated Student Housing
- Hospitals, Surgery Centers, and Medical Parks
- Places of Worship
- Convention Centers
- Buildings over 50 stories
- Amusement Parks
- Ski Resorts
What limits do you offer for the Real Estate Umbrella?
We include limit options of:
- $10,000,000
- $25,000,000
- $50,000,000
- $75,000,000
- $90,000,000
- $105,000,000
- $115,000,000
- $140,000,000
About Distinguished Programs
Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Real Estate, Community Associations, Hotels, and Restaurants. Property and liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished Programs’ high-limit umbrella programs remain the clear choice in its areas of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.
View a full list of our programs and submit business with Distinguished.
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