Assessing Commercial Property Insurance for Developers: Professional Liability, Environmental, Builder's Risk Policies

Recording of a 90-minute premium CLE video webinar with Q&A


Conducted on Thursday, April 22, 2021

Recorded event now available

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Course Materials

This CLE course will provide real estate counsel with advice on assessing and advising developers' insurance needs related to commercial property. The panel will guide counsel on the extent of insurance coverage to address the unique circumstance involved with real estate development. Counsel should be conversant with the potential risks to their developer clients and the types of policies available, so that they can prepare contract documents that require the right parties to purchase the right insurance.

Description

Real estate counsel must prepare to advise commercial real estate developers on the extent of necessary and adequate insurance. Most developers carry a commercial general liability policy. However, CGLs may not fully protect a developer against all risks during development. CGL policies address third-party claims involving bodily injury and property damage. They do not cover damage to the developer's own property, or professional or environmental risks.

The owner or general contractor on a project can purchase OCIP or CCIP, sometimes referred to as "wrap-up insurance," on behalf of all the development participants, such as the contractors, subcontractors, architects, and engineers. Though developers require all contractors working on a project to maintain insurance coverage, numerous participants' individual policies inject more risk into a project. A wrap-up policy can reduce finger-pointing and avoid possible coverage gaps by including all parties under one master general liability policy.

Real estate development and construction professional liability insurance is unique because it insures against real estate developers' professional services and can provide an additional layer of insurance for the construction and design professionals that they hire.

Some commercial redevelopment involves EPA-designated brownfields or other properties requiring remediation. Any project with potential environmental risks should be evaluated for environmental insurance coverage. Counsel must review the project due diligence and advise developers on the risk of failing to account for this liability exposure.

Construction projects must adhere to strict schedules to avoid costly delays. Builders' risk policies minimize delays by ensuring a quick resolution if a property claim occurs on a construction project. These policies also insure against accidental loss or damage to contractors' work and property during construction and extend coverage to project equipment, materials, and supplies. Builders' risk policies can include the owner, general contractor, and subcontractors.

Listen as our expert panel addresses the major types of insurance a real estate developer may need and how counsel can review and assess a developer's needs to assist in deciding on the policies necessary to handle a particular project's unique circumstance.

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Outline

  1. General liability
    1. Exclusion
    2. Risks
  2. OCIP/Wrap insurance
  3. Professional liability
  4. Environmental
  5. Builders' risk

Benefits

The panel will review these and other important issues:

  • What are the limitations of general liability policies related to commercial real estate development?
  • What gaps in coverage does OCIP address, and at what threshold should it be considered by a developer?
  • What circumstances/incidents are covered under a professional liability policy?
  • What types of environmental circumstances would necessitate a special policy?
  • How can a developer utilize builders' risk coverage to minimize delays?

Faculty

Kozdrey, Cheryl
Cheryl L. Kozdrey

Attorney
Saxe Doernberger & Vita

Ms. Kozdrey exclusively represents policyholders in complex insurance coverage litigation. She also advises insurance...  |  Read More

Pepe, Michael
Michael V. Pepe

Partner
Saxe Doernberger & Vita

Mr. Pepe focuses his practice on complex insurance coverage issues on behalf of policyholders, and has advocated for...  |  Read More

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