In Part Two of our Four-Part C.O.P.E. (Construction, Occupancy, Protection, Exposure) Underwriting Series, we will discuss Occupancy considerations for underwriting commercial real estate risks.  An important underwriting concern is the nature of the operations conducted in the building that could start or contribute to the spread of a fire or other potential losses.

Occupancy considerations your Underwriter is looking out for when rating your condominium association, apartment building or cooperative…

• Are there storefronts as well as apartments on the premises?  If so, the contents and business personal property that are found on the premises can be attractive targets for theft.
• If a ‘high-profile’ individual is residing in the condominium or cooperative, can this cause an emotional social response? How does an emotional social response lead to higher loss potential? Could the fact that this ‘high-profile’ individual is living at this premises have potential for loss or damage caused by vandalism, burglary and arson?
• Vacancy level and owner occupied vs. tenant occupied units are a concern for most condominium associations. It is preferred that the condominium association is owner occupied because owners have an active interest in the association.

Check back for Part III of our four-part C.O.P.E. series where we’ll be talking about ‘Protection’ considerations when underwriting a commercial real estate risk.

In case you missed it, below is the link to Part I of this four-part series where we have discussed Construction considerations.

Construction Considerations for Commercial Real Estate Risks

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