These have not been kind times to apartment landlords, multi-family real estate investors and owners.
The COVID-19 pandemic spurred eviction moratoriums nationwide, leaving many owners with no choice but to continue to pay to maintain and finance their properties with less rent coming in and no recourse to remove non-paying tenants. Insurance premiums, meanwhile, have been rising.
At the same time, a far-less-noticed threat to their investment can be found in the fine print of their insurance policies: Exclusions that are increasingly cropping up for assault and battery claims.
Landlords, of course, can be and have been repeatedly sued over claims – sometimes justified, sometimes not – that they’ve failed to ensure the safety of tenants.
That responsibility goes beyond just cleaning up slippery floors or repairing broken stairs. It also means taking appropriate security measures so that tenants are not left at an unreasonable risk for being victimized in a criminal attack.
Imagine an apartment building equipped with security cameras, buzzers and self-locking doors designed to allow only residents, their guests and authorized personnel to enter the building. Despite all that, an intruder somehow manages to enter the building and assaults a tenant. The tenant sues the owner for bodily injury.
It happens all the time.
In fact, juries have delivered multimillion-dollar awards to plaintiffs who have sued landlords, particularly if multiple crimes have been committed on the property or if the landlord did not take proper precautions.
The Assault and Battery Conversation
While there’s no doubt that property owners have a “duty to protect” occupants, the question of negligence revolves around the owner “foreseeability” of the violent event.
We’ll leave arguments over the finer points of the law to the courts. But as far as insurance goes, a General Liability policy just isn’t enough, especially now that assault and battery exclusions are becoming the norm.
Landlords, however, often overlook A&B coverage. They are not aware of it and it just doesn’t come up in the conversations they have with their brokers.
If you’re an apartment owner or investor, consider this your wake-up alarm.
A&B coverage can help you get back to business after a stabbing, shooting or beating on one of your properties. Specifically, assault and battery coverage helps pay those legal fees and settlements associated with a claim.
Beware, however, that whether added back to your General Liability policy as an endorsement or purchased as a standalone policy, A&B coverage typically comes in lower sublimits or may be available only through a surplus carrier.
A lower sublimit does it what it sounds like it, providing a lower amount of coverage to pay for A&B claims compared to limits available for other sorts of liability claims. Surplus lines carriers protect against financial risks deemed too high for a regular insurance company to take on.
Regardless, be aware that A&B exclusions are growing more common in policies written for apartment complexes, especially those located in high crime areas. Also, finally, if you’re not hearing about it from your broker, perhaps it’s time to make sure your broker is right for your business.
The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the nation. As an employee-owned organization, we’ve been protecting what’s yours since 1915. Contact us at firstname.lastname@example.org or 480-730-4920.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.