Actual rent roll
Current rents, reimbursements and other income should support the limit calculation.
Business Income & Rental Value for Commercial Real Estate
For a landlord, repairing the building is only part of the loss. The rent stream may remain impaired during reconstruction, tenant buildout and re-leasing.
Serving Utah and all 50 states. We help commercial property owners and investors across Utah, including Logan, Salt Lake County, Utah County and St. George, and we write commercial insurance for clients in all 50 states. Contracts, lenders and carriers often ask for specific limits and documentation, so we review your contracts and operations before going to market. Request a quote and we'll review your current program with you.
What to Review
The details that can change the insurance program.
Commercial real estate insurance is highly dependent on the building, occupancy, leases, valuation, protection and income exposure. A useful review goes beyond simply quoting the same limits.
Restoration period
The estimate should reflect permitting, demolition, construction, inspections and tenant reoccupancy.
Extended period
Income may not immediately return to normal when physical repairs are complete.
Lease structure
Gross, net and percentage-rent structures can affect how income is modeled.
Key Exposures
Questions worth answering before renewal.
Long-lead materialsSpecialized building systems can extend reconstruction.
Tenant lossA tenant may relocate permanently after a severe loss.
Code upgradesOrdinance-or-law work can extend the downtime.
Portfolio interactionA large owner may need location-specific and portfolio-level income assumptions.
Coverage Details
How business income and rental value protect Utah property owners
When a covered property loss makes space unusable, rental income can stop while expenses like debt service, taxes and payroll continue. Business income and rental value coverage is designed to replace lost rents and help pay continuing expenses during the restoration period.
Important details include how the limit is calculated, the length of the period of restoration, extended period of indemnity, and whether coverage applies when a loss at a neighboring property or a civil authority order prevents access.
Frequently asked questions
What is rental value insurance?
Rental value coverage pays the rents a property owner would have received, less non-continuing expenses, when a covered loss makes the property untenantable.
How do I set a business income limit for a rental property?
Start with expected annual rental income and continuing expenses, then consider how long it could realistically take to rebuild and re-lease the space. A business income worksheet can help.
What is an extended period of indemnity?
It continues coverage for a set number of days after repairs are complete, while occupancy and rents recover to pre-loss levels.
Do lenders require rental income coverage?
Many commercial lenders require a minimum amount, often stated in months of rent. Check your loan documents.
Related pages: Commercial Real Estate Insurance · Commercial Property Owner Insurance · Ordinance or Law Coverage · Multifamily Property Insurance · Office Building Insurance
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