Match the policy to the building
An apartment-building owner's first decision is whether the building fits a package policy or needs separate commercial property and liability forms. A package bundles building property, business interruption, and general liability into one program. GNY, for example, offers an apartment-building package designed for individual buildings, garden apartment complexes, and larger apartment schedules, combining property coverage for a building and contents after a covered event, mechanical and electrical breakdown, business interruption, improvements and betterments, and general liability protection for specified accidental bodily-injury and property-damage claims.[1]
California's Department of Insurance describes a business owners policy as a combination of property, general liability, and business interruption coverage that uses strict underwriting rules, including maximum square footage for apartment risks, and is aimed at qualifying low-density apartment houses. If a building does not qualify for a carrier's BOP or apartment package, ask whether separate commercial property and commercial general liability forms are available for that risk.[3]
The building's physical characteristics shape how a carrier rates and classifies the risk. A pending August 2026 Texas filing from United States Liability Insurance Company proposes a businessowners manual that treats apartment buildings as habitational, distinguishes apartments and mercantile-with-apartment occupancies by whether they have three stories or fewer or four stories or more, uses the highest applicable building rate when multiple occupancies share one insured building, varies habitational base rates by construction, and limits its sprinkler credit to properties with an operational system covering 100% of the premises in protection classes 1 through 8. That filing was assigned to a technician when captured and has not been approved.[13]
Protect the building and the rent stream
Commercial property coverage can protect the building itself and the landlord-owned property inside it. Travelers says its small-business commercial property insurance can protect business property the insured owns, leases, or rents, including buildings, equipment, furniture, fixtures, inventory, and property of others in the business's care or custody. For an apartment owner, that scope can extend to common-area furnishings, maintenance equipment, and landlord-installed appliances—but the issued policy, declarations, and endorsements control what is actually covered.[4]
- Business income and extra expense
Covers continuing expenses, lost rental income, and certain extra costs after an interruption caused by a covered event. The coverage does not apply to a flood loss when the business lacks flood insurance for that event.[5]
Review: Confirm the restoration period, covered causes of loss, and whether flood income loss requires a separate flood policy.
For a multifamily mortgage loan governed by the current Fannie Mae Multifamily Selling and Servicing Guide, the lender requires property insurance throughout the loan term, stated minimum insurable-value percentages, and business income insurance including rental value for all required coverages. Fannie Mae bases business income coverage on 12 months of actual loss sustained or the property's recent reported income measure plus continuing expenses.[6]
Coverage questions in this guide
A shared record keeps related coverage questions in one place.
- Building property
Covers the apartment building structure and landlord-owned property such as equipment, furniture, and fixtures after a covered event.[4][1]
Review: Confirm whether the policy covers replacement cost or actual cash value, and whether landlord-installed appliances and common-area furnishings are scheduled.
- Business income and rental value
Replaces lost rental income, continuing expenses, and certain extra costs during the restoration period after a covered interruption.[5][6]
Review: Verify the restoration period length, whether the trigger matches your rent exposure, and whether flood-caused income loss requires separate flood coverage.
- General liability
Responds to accidental bodily-injury and property-damage claims arising from premises conditions or building operations, with separate medical-payments limits.[3][1]
Review: Check per-occurrence and aggregate limits, whether the policy covers common areas and building operations, and whether your lender requires stated minimums.
- Excess or umbrella liability
Adds limits above the primary general liability policy. For a multifamily mortgage loan governed by the current Fannie Mae guide, the lender requires umbrella minimums starting at $1 million for up to 250 aggregate units.[8]
Review: Confirm whether the umbrella follows form over your CGL and meets your lender's unit-based minimum.
- Flood
A separate single-peril policy. The NFIP General Property Form provides building and contents coverage with separate deductibles, paid on actual cash value.[9]
Review: Determine whether your building is in a Special Flood Hazard Area, whether your lender requires flood coverage, and whether a private flood policy offers replacement cost.
- Ordinance or law
Covers increased costs when a damaged building must be rebuilt to current codes. For a multifamily mortgage loan governed by the current Fannie Mae guide, the lender requires this coverage when the property is nonconforming under current land-use law.[7][2]
Review: Check whether your building is nonconforming and whether the endorsement limit is adequate for a full-floor or full-building rebuild to current code.
- Earthquake or earth movement
Earth movement is a common special-form exclusion. Coverage may be available by endorsement or separate policy depending on the carrier and location.[10]
Review: Ask each carrier whether earthquake coverage is available and what deductible or sublimit applies.
Cover the owner's liability exposures
Premises liability protects the building owner when a tenant, visitor, or delivery person is injured by a condition in a common area or by building operations. California's Department of Insurance describes commercial general liability as covering accidental injury or property damage from a premises condition or business operations, with separate medical-payments limits. An umbrella policy can supplement the basic liability limits.[3]
GNY's apartment-building package includes general liability protection for specified accidental bodily-injury and property-damage claims, associated medical costs, and certain personal and advertising injuries. Whether liability is bundled in a package or written as a standalone commercial general liability policy depends on the carrier and the building's eligibility.[1]
- Excess or umbrella liability
Provides additional limits above the primary general liability policy. For a multifamily mortgage loan governed by the current Fannie Mae guide, the lender requires excess or umbrella insurance starting at $1 million for policies covering up to 250 aggregate units, rising by unit count.[8]
Review: Check whether your lender requires an umbrella, what unit-based minimum applies, and whether the umbrella follows form over your general liability.
Review the gaps before comparing premiums
Standard commercial property forms exclude or limit several losses that apartment buildings commonly face. Texas consumer guidance identifies flood, earth movement, wear and tear, and other common special-form exclusions, and lists business interruption, extra expense, ordinance or law, and boiler and machinery as coverages a buyer may need to add.[10]
- Sewer and drain backup — GNY lists this as an apartment-package enhancement, not an automatic coverage under every policy.[2]
- Ordinance or law — GNY lists this as an enhancement. For a multifamily mortgage loan governed by the current Fannie Mae guide, the lender requires ordinance or law insurance when the property is nonconforming under current land-use law or ordinance.[2][7]
- Equipment breakdown — GNY lists elevator collision for personal property of others as an enhancement. For a multifamily mortgage loan governed by the current Fannie Mae guide, the lender requires full equipment-breakdown or boiler-and-machinery insurance when the property has specified high-pressure or centralized equipment regulated by the state or municipality.[2][7]
- Flood — The NFIP General Property Form is a single-peril flood policy with separate building and contents coverage and deductibles. Covered building and contents losses are paid on actual cash value under that form.[9]
- Earthquake or earth movement — Texas consumer guidance lists earth movement as a common special-form exclusion. Ask each carrier whether earthquake coverage is available by endorsement or requires a separate policy.[10]
- Vacancy — Verify how each policy defines vacancy, what coverage restrictions apply during a vacancy period, and whether your lender imposes a separate occupancy requirement. Do not assume a universal vacancy rule applies across carriers.
- Tenant-owned property — Travelers notes that commercial property can cover property of others in the business's care or custody, but tenant-owned belongings inside leased units are typically the tenant's responsibility. Confirm which tenant property, if any, your policy covers and whether your lease requires tenants to carry renters insurance.[4]
- Crime — GNY lists employee dishonesty and forgery as an enhancement and crime as an optional separate coverage.[2]
- Commercial umbrella, cyber, directors and officers, employment practices, and workers compensation — GNY lists these as optional coverages available to apartment-building owners.[2]
Give each carrier the same complete submission
Carriers ask for overlapping but not identical information. Giving every carrier the same organized set of property facts helps submissions proceed without delays. Comparing quotes also requires recording the coverage, limits, deductibles, and exclusions each carrier offers so you can evaluate premiums on equal terms.
- Building age, square footage, construction type, safety features, and other occupants — Progressive lists these as property details needed for a business owners policy quote.[11]
- Five years of claim dates and paid amounts — Progressive asks for this claims history; Nationwide asks for five years of currently valued loss runs.[11][12]
- Mortgage company information — Progressive includes this in its property-detail checklist.[11]
- Rent rolls or equivalent statement-of-values information — Nationwide requires this for commercial real-estate submissions.[12]
- ACORD application and real-estate supplemental or equivalent underwriting information — Nationwide lists this as a submission requirement.[12]
- Executed third-party contracts and leases — Nationwide requires these for its commercial real-estate program.[12]
- Unit and story count, occupancy mix, construction, sprinkler coverage, and protection class — the pending USLI Texas filing shows why these details can change the rate class and available credits.[13]
When you receive quotes, record these fields for each option to make a fair comparison:
- Lender insurance terms — note any required coverages, limits, or named-insured and loss-payee requirements from your mortgage documents.
- Requested and offered coverages — list what you asked for and what each quote includes or excludes.
- Insured values and valuation basis — confirm whether each quote uses replacement cost or actual cash value and what building value it insures.
- Per-occurrence and aggregate limits, deductibles, and coinsurance — compare these across quotes so a lower premium does not hide a higher out-of-pocket cost.
- Income-restoration terms — note the restoration period, covered causes of loss, and whether the income basis matches your rent roll.
- Named exclusions — identify any exclusion that removes a loss you expect the policy to cover.
Property Covered is a property insurance marketplace operated by Switchboard Risk Technologies Inc., a licensed insurance producer. The marketplace has access to more than 400 carriers and market options. A quote request is free and carries no purchase obligation. To begin comparing available terms for your apartment building, call licensed support at (888) 693-8980.
Sources
- 1.Greater New York Mutual Insurance Company — Apartment Building Insurance product page
- 2.Greater New York Mutual Insurance Company — Apartment Building Insurance enhancements and options
- 3.California Department of Insurance — Commercial Insurance Guide
- 4.Travelers — Commercial Property Insurance product page
- 5.Travelers — Business Income and Extra Expense
- 6.Fannie Mae — Multifamily Selling and Servicing Guide: Property and Liability Insurance
- 7.Fannie Mae — Multifamily Selling and Servicing Guide: Ordinance or Law and Equipment Breakdown
- 8.Fannie Mae — Multifamily Selling and Servicing Guide: Commercial General Liability and Umbrella
- 9.FEMA NFIP — Summary of Coverage: Commercial Property
- 10.Texas Department of Insurance — Commercial Property Insurance Guide
- 11.Progressive Commercial — Getting a Business Insurance Quote
- 12.Nationwide — Real Estate Insurance for Businesses submission requirements
- 13.United States Liability Insurance Company — Texas For Profit Businessowners rate and rule filing USLI-135047370 (pending)
Common questions
An apartment building typically needs building property coverage, business income (rental value) coverage, and commercial general liability at minimum. Depending on the building, lender, and location, you may also need ordinance or law, equipment breakdown, flood, earthquake, umbrella liability, and other endorsements. The exact combination depends on the carrier's underwriting rules, your lender's requirements, and the building's characteristics. [1][3][6]
Some apartment buildings qualify for a BOP, but carriers use strict underwriting rules. California guidance notes that a BOP is aimed at qualifying low-density apartment houses and uses maximum square footage limits. If a building does not meet a carrier's BOP criteria, ask whether separate commercial property and general liability forms are available for that risk. A pending Texas filing shows that story count, occupancy mix, construction, and sprinkler coverage can also affect how a carrier classifies and rates an apartment building. [3][13]
For multifamily mortgage loans governed by its current guide, Fannie Mae requires property insurance throughout the loan term, business income insurance based on 12 months of actual loss sustained or the property's recent reported income measure plus continuing expenses, at least $1 million per occurrence and $2 million aggregate in commercial general liability, and unit-based umbrella minimums. It also requires ordinance or law coverage when the property is nonconforming and equipment-breakdown coverage when the property has specified regulated equipment. These are Fannie Mae loan requirements and do not govern other lenders or unfinanced buildings. [6][8][7]
Continue your research