While owning an apartment building in Tennessee can be both personally and financially rewarding, apartment building owners take on a great deal of risk. Without the right apartment building insurance, owners can face serious financial harm if there is a property loss or if they are sued. 

What Is Apartment Building Insurance?

Apartment building insurance is a specific type of business insurance that is designed to meet the unique needs of apartment buildings in Tennessee. It is typically a package of several policies that cover property damage and lawsuits, allowing you to focus on running your business and serving your tenants.

How Can I Insure an Apartment Building in Tennessee?

Most apartment buildings in Tennessee need property insurance and liability insurance at a minimum. But not every risk you face is covered by these basic policies. 

You’ll likely need to purchase a variety of additional Tennessee business insurance policies to make sure that your apartment building and your business interests are protected from the numerous property losses and claims of negligence that can arise on one of your properties. 

What Does Apartment Building Insurance Cover in Tennessee?

Tennessee apartment building owners need several types of coverage to protect them from property and liability risks.

Property Coverage

This protects against the loss of your apartment building or buildings within a complex, as well as other structures such as garages, office space, common areas, fences, swimming pools, and storage buildings. Your apartment building property insurance should also cover any additions or improvements that are completed or under construction, as well as any business personal property that is kept on the premises and used to maintain or service the building and grounds. 

Remember that your property insurance coverage will be subject to a deductible if you have to file a claim. If you own a multi-building complex, does your deductible apply per building, or per occurrence? This distinction is important for you to understand and choose wisely when you purchase your coverage. 

Loss of Income Coverage

This important coverage reimburses you for lost business income (rent) if the premises is damaged by a covered loss (storm, fire) and results in a loss of income or suspension of operations while repairs are made to the property. 

Liability Insurance

This protects against claims of actual or alleged property damage or bodily injury by third parties (tenants, visitors, repair persons, delivery persons, etc.). This is the type of coverage you need to protect you from lawsuits if a tenant or visitor is injured at the complex pool or gym, or even by minor events like slips, trips, and falls on the premises. 

What Does Apartment Building Insurance Not Cover in Tennessee?

Your basic property and liability policies offer very broad coverage that protects your apartment building in a wide range of circumstances. But they don’t cover anything, and in fact, both exclude coverage in certain areas where you may have serious exposures. 

If, for example, you have business-owned autos, your liability policy will not cover any injuries or damage caused by an auto accident involving one of your vehicles. You’ll also need to purchase coverage for worker injuries and employment-related lawsuits. 

What’s more, apartment building insurance in Tennessee does not cover the personal property of your tenants. 

Fortunately, you can purchase a wide range of additional stand-alone policies or policy endorsements (coverage add-ons) to make sure you get coverage for situations that are excluded from coverage or not sufficiently covered under your basic property and liability policies. 

• Equipment breakdown/boiler and machinery coverage: This covers damage and loss of income caused by a breakdown of covered equipment, such as steam boilers and other mechanical systems. 
• Commercial umbrella insurance: This provides excess liability protection for events that exceed the limits of your other liability coverage. 
• Workers’ compensation insurance: This protects employees who work on the premises from the costs of work-related illnesses or injuries. 
• Commercial auto insurance: This covers any autos owned by your rental property business, such as shuttle buses or maintenance trucks.
• Employment practices liability coverage: This protects you if a current or former employee sues you for discriminatory employment practices.

Be aware that flood damage is not covered under any of your Tennessee apartment building insurance policies, but if you are located in an area that is prone to floods, purchasing flood insurance is highly recommended. 

You can purchase business flood insurance from the National Flood Insurance Program. It covers property damage caused by flooding.

How Much Does It Cost to Insure an Apartment Building in Tennessee?

The cost of apartment building insurance in Tennessee will depend on a variety of factors including:

• The age of your roof and mechanical systems
• The age of the building 
• The location of your building or complex 
• The type of building (e.g., high-rise, duplex, multi-family, etc.)
• The type of construction 
• The presence of a swimming pool, fitness center, or clubhouse
• The presence of up-to-date security and fire protection systems

How Can an Agent Help Me Insure an Apartment Building in Tennessee?

Apartment buildings present a very unique set of risks that owners must insure against. With the help of an experienced independent insurance agent in Tennessee, you can find the right mix of property and liability coverage to protect an apartment building.

A local independent insurance agent can work with you one-on-one to determine the types and amounts of coverage you need and can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.