NEW YORK CITY—Guiding you through risks and potential underwriting perils, Lance J. Ewing of AIG provides his market-spanning insights. A recipient of the Risk Manager of the Year for Business Insurance and Risk Innovator of the Year awards, Ewing is an internationally recognized authority on insurance, risk management, crisis management and risk financing, among many other insurance and risk-related subjects. At AIG, he serves as the leader for Hospitality and Leisure, as well as the Real Estate Industry Practice Groups.
Have a question for the Insurance Leader? Ask him about it by clicking here.
Many commercial real estate owners and management companies are concerned about their general liability insurance. And for good reason: the risk factors for real estate can be very significant. With many policies providing limits under $5 million, there can still be large slip-and fall claims or on-site violence or shootings that are large indemnity losses. Adding insult to injury, the legal defense costs sometimes attached to the primary policy are where significant dollars emerge.
(Watch AIG’s Christopher McKeon discuss general liability
in the video at the end of this story.)
The property owner needs to have a solid GL program to protect their interests, along with defense protection from third parties alleging negligence. A review of your current general liability policy by your insurance agent or broker is imperative, especially if your risks have increased or new properties are added.
Also important for a property owner is to require—and evidence through a certificate of insurance—that tenants maintain adequate liability coverage. It’s also important that owners ensure they are included on the tenants’ coverage as an additional insured. For other third parties working on-site, evidence of insurance and hold harmless agreements are essential.
Certificates of insurance are very important, especially in making sure they comply with the required limits of the owners. Many firms still use a manual process which can lead to oversights. Having a technology-based certificate review process is a good risk management practice.
The property owner has a responsibility to maintain a safe environment and must be attentive to maintaining security or prior crimes on the premises and if there are deficiencies the owners must make sure they are addressing these areas. Window guards, lighting, security cameras, repairs are all areas they must be on top of.
Those real estate owners and management firms that have sound internal risk management policies are the ones that are in a better position to limit significant losses. Also, having written policies and procedures that are followed goes a long way to demonstrating credibility and that as a firm you anticipate and proactively address issues.
For more information on your liability policy, contact your insurance carrier or agent/broker.