Commercial Condo Insurance Vaughan

The Oracle RMS team is ready to create a top-notch commercial insurance plan to safeguard your commercial condo unit. To assist you in protecting the assets of your business, we are prepared to develop an insurance strategy specifically tailored for your condo unit and its contents. Our licenced insurance professionals will consult with you to ensure we fully understand your insurance needs and objectives before helping you select the most appropriate commercial insurance coverage.

Oracle RMS FAQ:

What is covered under commercial condo building insurance?

Commercial condo building insurance (different from commercial condo unit insurance) is generally purchased and maintained by the condominium corporation or the building’s owner. It typically includes coverage for general liability, directors and officers liability, business property, and equipment breakdown insurance (boiler and machinery coverage).

Commercial general liability insurance

This insurance protects the policyholder in the event that a visitor gets hurt, dies, or experiences personal property damage while on the insured’s property. It covers the costs for any associated legal or settlement fees, medical bills, and damages (up to the policy’s coverage level).

Directors and officers liability insurance

This insurance covers the cost of any allegations of misconduct against the directors and upper management of your condominium (typically the condo corporation), such as a violation of trust or duty.

Commercial property insurance

This insurance protects the building’s physical structure and its contents, including furnishings, tools, electronics, and other items within or outside the building, from loss or property damage caused by an insured peril. Insured perils can include falling objects, fire, vandalism, theft, natural disasters, and some unintentional damage. 

A condominium’s commercial property insurance policy will cover the physical building and shared areas, like lobbies, elevators, gyms, pools, and foyers, but it does not cover individual units. 

Equipment breakdown insurance

If a specific type of mechanical, electrical, or pressure equipment malfunctions due to internal causes, such as electrical shorts, power surges, mechanical breakdowns, operator mistakes, or motor burnout, this coverage offers insurance for damaged contents and property damage. This generally includes elevators, boilers, electric panels, generators, fire systems, water tanks, freezers and much more.

What is not covered under commercial property insurance?

Although commercial property insurance covers a variety of situations, condominium owners should be mindful that their insurance policy won’t protect against all potential incidents or damages. Thankfully, commercial property insurance policies are explicit in their terms and conditions about which situations are covered and which are not, just like other types of insurance. Below we’ve provided a list of some of the common situations that are not covered by commercial property insurance.

• Obvious maintenance neglect and associated damages,
• Flood damage (different than water damage),
• Liability claims,
• Earthquakes,
• Intentional property damage, 
• Commerical vehicles, and
• Units or buildings left vacant for more than 30 days.

Why do you need commercial property insurance if you own a condominium building in Vaughan?

By acquiring commercial property insurance, a condominium can be financially shielded against several threats. In fact, per the Condominium Act for Ontario, condominiums are not permitted to operate without insurance, which typically includes commercial property insurance.

With commercial property insurance in particular, it should be noted that a condominium is probably situated on a very valuable piece of land, making any damage rather expensive to fix or replace. These costs may be fully or partially covered when someone purchases property insurance. This frequently includes losses caused by fire, bad weather, explosions, vandalism or theft. Whenever someone owns multiple condominiums, they must ensure that each building is adequately insured.

What are commercial condo insurance risks?

There are various common risks to take into account when purchasing commercial condo insurance. However, the cost is most significantly impacted by two basic risk factors. These include the cost of your company’s assets and the probability of weather-related catastrophes.

The price of your company’s assets, which includes the actual condo unit, is a crucial and primary factor. Ultimately, this determines the amount your insurance provider would be obligated to pay if your commercial condo unit and everything inside of it were damaged or destroyed. An inventory record of the physical assets within the condo unit should be given to your insurer to help them accurately determine the precise replacement cost of your business and the amount of coverage you require.

Due to the increase in environmental disasters, the likelihood of an extreme weather event also accounts for a sizeable portion of the cost of condo insurance. As such, commercial property owners close to or in areas with a higher chance of encountering a weather-related calamity usually pay more for commercial insurance. For instance, the probability of obtaining higher insurance estimates for your commercial condo insurance is likely to increase if the city where your condo unit is located is well known for natural disasters such as earthquakes, frequent hailstorms or flash floods.

Commercial condos are also frequently exposed to the following risks:

• Fire, water, and storm damage.
• Robbery, break-ins, and vandalism.
• Liability claims.
• Equipment breakdowns or malfunctions.

Does the law require commercial condo insurance in Vaughan?

Commercial insurance for a condominium building is required by law. The condominium association or the owner of the building is required to get and retain condominium building insurance. Often, it is the corporation that purchases and maintains it. A condominium association must acquire insurance that covers both the structure’s physical structure and any common amenities, including lobbies, elevators, event spaces, and foyers. However, individual units are not covered by their policy.

Commercial condo unit insurance, on the other hand, is not required by law in Vaughan or anywhere in Ontario. So, business owners are not required to carry it unless your condo association mandates that each tenant obtain their own insurance policy.

However, since businesses operating out of commercial condo units are more at risk for extreme losses and damages, it is strongly urged that they carry commercial property insurance. In spite of the fact that every industry faces risks, condominiums are especially vulnerable because of their close proximity to neighbouring units. Furthermore, a condo association may ask its tenants to fill in any coverage gaps if it finds that its insurance policy is insufficient to cover losses or legal fees.

Do I need extra insurance for condominium building work?

It’s possible. You should always contact your insurer before starting a remodelling project on your condominium. Your insurance provider can help you determine whether you require extra protection for certain renovation projects.

On top of that, your current insurance limits might not be sufficient to compensate if someone is hurt while the building is renovating. Also, if you make alterations that increase the property’s cost to rebuild, your current insurance may no longer be adequate.

Furthermore, even if you don’t think you need additional insurance for your renovation work, always inform your insurance company before you begin. If you file a claim during a building remodel but fail to notify your insurer that your condominium is undergoing renovations, your claim may be denied.

Who is responsible for insuring a commercial condo?

Both the building’s owner or condo corporation and the condo unit owners have individual and joint responsibilities for maintaining a condominium. This necessitates the purchase of two insurance policies. 

The condo association will purchase one policy. The building itself, as well as any shared areas, such as front lobbies, swimming pools, and elevators, are covered by their insurance policy. However, their policy does not cover individual condo units.

As the building’s insurance policy does not cover individual units, condo unit owners will be responsible for paying for any losses, alterations, damages, personal property liabilities, and other costs that occur within their units. Therefore, it’s crucial for unit owners to have a comprehensive insurance policy of their own that shields them from risks not covered by the condo corporation’s coverage.

Without commercial or residential condo unit insurance, the tenant could be responsible for:

• Any damage to the corridor or other condo units that began in their unit and extended to communal areas or nearby units, including fire and water damage.
• Any medical bills or legal fees resulting from a guest who was injured inside their unit.
• Any loss or repair expenses due to a break-in that causes damage to their unit.

What are the requirements for a commercial condo unit insurance policy?

Every condominium has a unique set of criteria for risks, liabilities, and insurance requirements. As a result, each condominium will require a unique insurance policy. When purchasing a condo unit, you have the right to request a copy of the building’s insurance policy so that you are aware of any possible self-coverage requirements. Be sure to read it completely.

As certain condominium corporations may mandate you to purchase a specific level of insurance for your condo unit, you will also need to ensure you are mindful of the building regulations. Condominium unit owners should also periodically review the building’s insurance policy because its coverage may vary from year to year. By doing this, you can ensure that your commercial condo unit insurance policy covers anything else that isn’t covered by your condominium.

Can I insure a condominium building I don’t own?

Yes. In accordance with the Condominium Act in Ontario, a condo corporation may acquire and maintain insurance, both on its own behalf and on behalf of the owners, for damages to the units and common elements brought on by major hazards or other insured perils that the declaration or the by-laws specify.

Are there any disadvantages of commercial condo insurance?

The price

Commercial property insurance can be pricey, which is one of the main motives behind why people often second-guess whether or not to buy it. Some people might struggle to afford insurance due to the high monthly premium rate and ongoing financing requirements.

It’s important to remember, though, that a low deductible may translate into high insurance prices. So, if you believe your financial circumstances allow it, talk to your insurance advisor about the benefits of increasing your deductible amount to assist in lowering your rates.

Lack of overall coverage

You should also be aware that commercial property insurance likely does not cover all potential damages that your condo unit could experience. For instance, your coverage may not cover losses brought on by flooding (which is different from water damage) or other natural disasters. As such, it is crucial that you recognize the particular coverage options that your policy provides. You may, of course, add extra coverage to your insurance, but that brings us back to the cost issue, as greater coverage entails paying higher rates.

Possible hidden fees

Finally, commercial property insurance sometimes has some hidden costs. Due to being frequently buried within the terms and conditions of policyholders’ contracts, they can sometimes be overlooked or missed. Fortunately, working with a trustworthy insurance broker, like one of our insurance specialists at Oracle RMS, can make it simple for you to identify any hidden costs in your contract and perhaps even negotiate for a lower price.