Whether tenant's delinquency is related to a change in industry conditions, overexpansion, an unanticipated event which causes the tenant's business to suffer, or a downturn economy where it becomes no longer financially viable for a commercial tenant to continue its operations at the leased property and faces the prospect of defaulting on the lease, financial impact can be severe when a tenant default. The property owner suffers an immediate loss of income until the tenant is evicted and the property released, and it can take months to find a replacement or evict a tenant. Property owners also face significant legal expenses - all while having to maintain mortgage and property tax payments.
What is Commercial Real Estate Rent Default Insurance?
Commercial Real Estate Rent Default Insurance is a risk transfer vehicle to property owners who are heavily reliant on consistent rent payments from their tenants to maintain their investment.
Commercial Real Estate Rent Default Insurance protects commercial property owners against loss of rental income during tenant eviction events.
Commercial Real Estate Rent Default Insurance can also provide reimbursement for the tenant's leasehold improvements once the tenant is removed, and it covers legal expenses associated with the eviction.
Rent defaults have become one of the biggest problems facing both small and large property owners alike.
- Coverage provided by a non-admitted A.M. Best A+ (Superior) rated carrier.
- An affordable product. Minimum annual premium as low as $850.
- Reimbursements of net rental income replacement to the maximum of 6 (six) months.
- Reimbursements of attorney's fees and court fees to the maximum of $500.
- Reimbursements tenant's leasehold improvements.
- An insurance policy issued to property owner - property owners are the first named insured.
- Multiple properties under one policy.
- Multiple units per property.
- Policy trigger is eviction due to non-payment of rent.