Do Shopping Centers Need Insurance?

Owning or operating shopping centers can be a lucrative but complicated venture.

Given the many types of tenants you may welcome to your property and the wide variety or risks and exposures included in operations, you must be meticulous in your risk management and loss control efforts.

This should invoke discussions on one of the most important investments any shopping center might ever make: insurance.

Why Do Shopping Centers Need Insurance?

Shopping centers inherently include many risks and exposures, and lacking sufficient insurance coverage could incur devastating financial consequences.

As you seek to maintain the physical structure of your property and account for potential liabilities and other financial risks, insurance should be at the forefront of your mind to ensure you can manage the fiscal ramifications of unexpected incidents.

Additionally, some types of insurance may be mandated by law, and failing to adhere to such requirements could lead to fines and even being forced to shutter your premises.

What Types of Insurance Do Shopping Centers Need?

The unique circumstances of shopping centers can vary greatly, potentially shaping insurance needs beyond any one-size-fits-all solution. However, several types of insurance may be valuable for most policyholders involved in this line of business. Consider the importance of the following:

• Commercial property insurance—Given the size and scale of many shopping centers, financial protection for the physical premises should be a top priority. Commercial property insurance can cover storefronts, roofs and parking garages, and may also offset losses involving other assets, such as equipment, tools and furniture.

• Business interruption insurance—Often available as an addition to commercial property insurance, this type of coverage, also known as business income insurance, can limit out-of-pocket losses if your center must temporarily shut down. Payouts could assist with various expenses and damages, including loan payments, employee payroll and reduced revenue.

• General liability insurance—With shopping centers welcoming hundreds of guests, insurance should be shaped to account for potential third-party losses. This form of coverage can provide a barrier against financial repercussions should you be at fault for an incident in which someone else is injured or their property is damaged. General liability insurance may also assist with legal expenses arising from personal injuries, such as if you wrongfully detain someone and they sue.

• Workers’ compensation insurance—Legally required for most employers, this type of coverage can help your shopping center’s employees recover and maintain their standard of living if they are injured on the job or develop a work-related illness. It may also offset legal expenses and losses should such incidents lead to lawsuits.

• Landlord insurance—The rent you accrue from retailers at your shopping center is a key part of your business’s viability. However, if tenants suffer losses for which you are at fault, such as by failing to maintain the premises, you could be sued. Additionally, if parts of your center become temporarily uninhabitable, you may lose income. In such situations, landlord insurance can offset these losses.

Your shopping center may also require additional types of insurance depending on the details of its operations. For example, if you own and use your own motor vehicles, such as delivery vehicles or maintenance vans, commercial auto insurance is necessary.

We’re Here to Help

At Golden Gables Insurance Agency, we stand ready to assist shopping centers in securing the proper coverage. Contact us today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.