The Proper Way to Insure a Mixed-Use Building: 4 Things to Know

Mixed-use properties are a popular arrangement in cities, but they can be found in towns of all sizes. With shops, offices, or restaurants on the ground floor and a block of apartments above, they’re a great way to utilize valuable real estate space. Plus, they count as commercial investments, so they can even save the owners on taxes.

Unfortunately, with totally different risks for the different commercial and residential sections, mixed-use buildings can be complex to insure. Here, Muller Insurance, which provides this type of coverage in New Jersey and other states, offers four tips to keep in mind when navigating mixed-use insurance.

1. Assess the Risks for Both Sections.

To properly and completely insure your mixed-use property, you’ll need to understand the risks you’re insuring against. The residential parts of the building are vulnerable to a variety of factors, including:

• Fire or storm damage
• Loss of rental income due to a covered claim
• General liability
• Sewer drain clogs
• Vandalism

Meanwhile, the risks facing a commercial building are similar but often greater. For instance, buildings with commercial establishments that take customers or clients are more at risk of liability claims. Meanwhile, shops and stores are a temptation for burglars who may damage parts of your building to gain entry.

2. Customize Commercial Coverage Based on Your Tenants.

Your mixed-use property insurance should be tailored to fit the commercial section of the building. Different kinds of businesses have varying needs and risks, so insuring them isn’t a one-size-fits-all task. For example, a restaurant might not have much for burglars to steal, but large kitchens can increase the likelihood of a fire. Liquor liability is only a factor if the building owner occupies the restaurant. The restaurant is responsible for having liquor liability, not the building owner.

3. Purchase a Single Policy.

Luckily, you don’t need to buy separate policies for each section of the building. It’s possible to buy a single mixed-use building insurance policy that sufficiently covers the risks for both the residential and commercial sections. It’s important to note, however, that because commercial properties face greater risks and stricter regulations, most residential insurers won’t insure a mixed-use building. Luckily, Muller Insurance works with numerous commercial providers to find building owners the right coverage.

4. Treat the Building like a Business.

If you hire employees to maintain the building, also consider workers’ compensation insurance to cover workplace accidents or illnesses.

Reach Out to Muller Insurance

Mixed-use property insurance is tricky, but it’s far from impossible to find the right coverage. Make the process as easy as possible by working with a knowledgeable insurer who can tailor a policy to fit your building – without any gaps. At Muller Insurance, we have over a century of experience serving mixed-use building landlords in New Jersey and beyond. Contact us today to find out more about how we can help you with mixed-use insurance.