The latest update of the Downtown Denver Partnership’s development map highlights two important figures for anyone involved or just watching the commercial real estate scene.
First, it shows that the area has seen 83 completed or under-construction projects since 2013. Secondly, the value of all these projects is more than $5 billion.
Better yet, the welcome news to anyone concerned about Denver’s housing shortage is that many of the projects underway are apartments or condominiums, with nearly 10,000 new residential units in the downtown area.
Many of these units are being built and will be owned and managed by real estate professionals. Others are being acquired by real estate investors who are no doubt new to the game.
It’s these investors we worry about most, not just because real estate can be much more complicated than it seems, but because the potential to end up in landlord-tenant disputes is always high.
Trouble-filled scenarios are all-too-common.
Imagine a property manager that isn’t diligent in property upkeep. Or one that refused to rent to an individual based on their handicap. How about a class-action suit brought against a property manager and owner who failed to keep adequate records of interest owed on renters’ deposit funds?
All the above require a form of insurance – real estate Errors and Omissions Insurance – that too often is overlooked (or disregarded) by real estate investors and landlords, leaving them vulnerable to large losses.
As in all such policies, a real estate E&O policy will protect the insured against mistakes due to negligence or breach of contract.
More specifically, these policies include coverage against allegations of denial of housing due to race, ethnicity, handicap, religion, sexual orientation, marital status and age.
There’s also wrongful eviction liability coverage, which covers owners of rental properties against allegations of lost or un-deposited rent checks, eviction for excessive noise and more.
Just fighting these sorts of claims can, of course, cost a fortune in legal fees. But E&O helps ensure you don’t pay for lawsuit expenses.
Typically, property owners and managers know they need a General Liability Insurance policy to cover them in case someone suffers an injury on their property or for damage caused to someone’s property. GL policies also cover what are known as advertising injuries. But no GL policy will shield them for failing to meet their contractual obligations or on any of the professional work they do.
There are those in the business who chose not to buy E&O as a risk-management strategy. Their line of thinking is that when mistakes happen — an omission of some sort — they take care of it immediately and make things right.
That works, too, until they find themselves in court.
Eric Gabrielsen is a CCIG Insurance Adviser. Let him know if you have questions or concerns. Reach him at EricG@thinkccig.com or 720-212-2027.
CCIG is a Denver-area insurance brokerage with the full-service capabilities of a national brokerage. We do more than make sure you have the right policy. We also help you manage your long-term cost of insurance with our risk and claims management expertise and a commitment to service excellence.