Here is what you want to know…
In recent years, a growing number of businesses, from construction companies to retailers, have turned to real estate investment as an added revenue stream. For efficiency and to cut costs, many business owners manage their investment properties using resources and staff shared by their primary business.
Unfortunately, we have seen what can happen to a business that also operates real estate on the side, and doesn't have the right insurance in place. Their main business is prone to be pulled into a messy legal battle.
Dov* is the owner of DreamTeam LLC*, a retail travel agency. Dov also owns some investment properties that he rents out for additional income. He uses his DreamTeam employees to help him manage the properties. His secretaries answer tenant phone calls and rent bills are sent on DreamTeam stationary.
One day a tenant was injured on his property and sued Dov and his company DreamTeam LLC. DreamTeam’s liability insurance refused to defend him in court, claiming that property management was not a covered business operation.
Dov had separate insurance for this property, and he thought he was fully covered. It hadn’t occurred to him that his main business remains vulnerable because of its real estate operations.
Our experience shows, that property and liability insurance for the building is not enough for Business Owners who use their business resources to manage their real estate. Be smart. For less than $1,000 you can obtain coverage for "real estate management".
We believe that investing in real estates is a great way to build wealth, but not at the expense of your Bread and Butter business. If you currently own or plan to invest in real estate as a side business, reach out to us to ensure you have the proper coverages in place.
For all your insurance needs, Adler’s insurance is here to help. We’ll work with you to find the right real estate management plan so that your business and investments will thrive. Contact us today at (845) 356-5656.
*All names and businesses are fictional and for informational purposes only.