Real Estate Finance: Evaluating Property Insurance Under Current Lender Standards
Determining Replacement Cost, Business Interruption, Flood, Windstorm, Earthquake, Ordinance and Law, and Terrorism Coverage
Recording of a 90-minute CLE webinar with Q&A
Conducted on Wednesday, January 11, 2017
Recorded event now available
This CLE webinar will provide real estate counsel with an understanding of the various components of property insurance and the current requirements of lenders with regard to 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.
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, in part because insurance companies frequently need information taken from other third-party reports before insurance policies can be finalized.
Real estate counsel must have an understanding of when various insurance policy coverages are required and how they are impacted by 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, consisting of an insurance consultant and closing counsel, discusses replacement cost, ordinance and law, flood, windstorm, earthquake, business interruption and terrorism insurance, and how coverage amounts are determined. They will also discuss how certain coverages are tied to information taken from survey, zoning and other third-party due diligence, how insurance requirements are addressed in the loan documents, and insurance company ratings required by CMBS and other institutional lenders.
- Discussion of standard and optional coverages included in property insurance policies
- Replacement cost
- Business interruption
- Ordinance and law
- Boiler and machinery
- How third-party due diligence affects the foregoing coverage
- Appraisal—breakdown of property value and income calculations
- Survey—flood zones, zoning designation and related information
- Title—appurtenant easements and other issues
- Zoning—conforming vs. legal non-conforming
- Engineering report—earthquake zones
- Drafting tips with regard to deal-specific insurance provisions
- Insurance carrier ratings—lender requirements
The panel will review these and other key issues:
- What types of coverage are currently required 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 therefrom) reflected in the loan documents?
Michael J. Bordy, Principal
Michael J. Bordy, A.P.L.C.,
Mr. Bordy is a transactional attorney who has 26 years of experience handling a variety of issues in business, corporate law and real estate. He regularly advises clients on real estate finance and leasing. His expertise encompasses real estate contracts, property rights, commercial property transactions, eminent domain, zoning, land-use and building permits, and negotiating real estate agreements.
Alexandra Hayden, Esq., Transaction Counsel
Harbor Group Consulting,
Ms. Hayden serves as Transaction Counsel, conducting insurance risk analysis on transactions ranging in size from $2 million to over $600 million on behalf of lending clients. Prior to joining her firm, she practiced law with a firm that specialized in commercial real estate transactions. She worked with the lending group representing banks in the drafting and negotiation of the loan documents for commercial properties.
Katherina Komisarjevsky, Chief Operating Officer
Harbor Group Consulting,
Mrs. Komisarjevsky is responsible for the management oversight of the firm’s large loan transactions, including balance sheet, syndication and CMBS loans. As Head of CMBS, she is responsible for managing, negotiating and closing CMBS transactions for the firm, including all stand-alone securitizations. She has overseen transactions totaling more than $500B, including many of the largest and most noteworthy. She also consulted on the first financing completed by the Federal Reserve utilizing the TALF program. She is called upon for speaking engagements, insurance seminars and contribution to publications and internal presentations of many prominent law firms.
Kevin D. Smith, CPCU, ARM, Vice President
The Graham Company,
Mr. Smith is the leader of his firm's Real Estate Division and the International Division. He also manages the firm’s Group Captive and is an active member of the Risk Management Division. He spearheads his firm’s involvement in several real estate industry organizations. He presents and is a published author on key issues in the risk management industry, including but not limited to captive insurance, international insurance issues, contractual risk transfer and real estate portfolio insurance programs.
CLE On-Demand - Streaming Video
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It was a very good program with very experienced speakers.
Kimball Tirey & St. John
I appreciated the 'real world' examples on how a Seller or a Buyer would actually approach a particular rep or warranty issue in today's market.
The speaker's practical discussions were particularly helpful.
Kenneth J. Clarkson
Sullivan, Ward, Asher & Patton
Length was ideal and the topic was timely. Excellent!
University of Washington
The speakers were obviously experienced and communicated the relevant information very well.
Dean Mead et al
Real Estate Law Advisory Board
Stroock & Stroock & Lavan
Robinson & Cole
Jenner & Block
Kilpatrick Townsend & Stockton
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