Evaluating Property Insurance in Real Estate Finance Transactions

Replacement Cost, Business Interruption, Flood, Windstorm, Earthquake, Ordinance and Law, Terrorism Coverage

A live 90-minute premium CLE video webinar with interactive Q&A


Tuesday, January 4, 2022

1:00pm-2:30pm EST, 10:00am-11:30am PST

or call 1-800-926-7926

This CLE course will provide real estate counsel with an understanding of the various components of property insurance and the current requirements of lenders concerning each type of coverage. The panel discussion will include replacement cost, business interruption, ordinance and law, flood, windstorm, earthquake, and terrorism coverage; when each coverage is required; and how coverage amounts are determined.

Description

Evaluation of property insurance has become a complex undertaking in commercial real estate finance. It is often the final item to be resolved in a transaction, partly because insurance companies often need information from third-party reports before finalizing insurance policies.

Real estate counsel must understand when various insurance policy coverages are required and the impact of the appraisal, title, survey, zoning report, and engineering report. Loan document provisions may need to be revised to reflect deal-specific insurance requirements.

Listen as our authoritative panel discusses replacement cost, ordinance and law, flood, windstorm, earthquake, business interruption, terrorism insurance, and how coverage amounts are determined. They will also discuss how certain coverages tie to information from surveys, zoning, and other third-party due diligence, address insurance requirements in the loan documents, and insurance company ratings required by CMBS and other institutional lenders.

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Outline

  1. Discussion of standard and optional coverages included in property insurance policies
    1. Replacement cost
    2. Business interruption
    3. Ordinance and law
    4. Terrorism
    5. Flood
    6. Windstorm
    7. Earthquake
    8. Boiler and machinery
  2. How third-party due diligence affects coverage
    1. Appraisal: breakdown of property value and income calculations
    2. Survey: flood zones, zoning designation, and related information
    3. Title: appurtenant easements and other issues
    4. Zoning: conforming vs. legal non-conforming
    5. Engineering report: earthquake zones
  3. Drafting tips for deal-specific insurance provisions
  4. Additional insured and other endorsements critical to the lender
  5. Insurance carrier ratings: lender requirements

Benefits

The panel will review these and other key issues:

  • What are the currently required coverages in real estate finance transactions?
  • What information is needed from appraisal, survey, title, zoning, and engineering reports to finalize coverage?
  • How are coverage parameters determined?
  • What are the current rating requirements for insurance carriers, and what do the parties do when the existing carrier is not approved?
  • How are insurance requirements (and deviations) reflected in the loan documents?

Faculty

Hayden, Alexandra
Alexandra Hayden, Esq.

Director, Legal Specialist
Harbor Group Consulting

Ms. Hayden joined the firm in 2014 and serves as a Director, Legal Specialist in the Commercial Real Estate Practice....  |  Read More

Smith, Kevin
Kevin D. Smith, CPCU, ARM

Managing Director
The Graham Company

Mr. Smith joined The Graham Company in 1999 and is a Managing Director currently responsible for the firm’s...  |  Read More

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