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Broadening Endorsements: Packaged Forms to Provide Greater Insurance Protection

By October 5, 2021February 9th, 2023No Comments

In our January article, we briefly reviewed some of the upgrades that are coming to many of the preferred markets for Apartment Building Insurance that you all are using so as to provide greater protection; this is called responding to the marketplace!  And, there is a corollary:  When an insurance company offers upgrades coverages, they generally require new applicants to have also upgraded their properties, mostly in the realm of upgraded property maintenance.    

We mentioned, in that article, that these coverage enhancements generally come to you in two ways; the companies upgrade their primary forms and then then offer – for an additional premium – their Broadening Endorsements.  Broadening endorsements are forms that grant you a lot of coverage, much of which coverage you would never buy as an individual endorsement and much of which is a tremendous value for the cost as these additional coverages greatly expand your protection. Typically, the broadening endorsements cost less than 3-4 individually purchased endorsements.  It’s sort of like supersizing your drive-through meal!

We wish to point out the additional coverage inside these endorsements which may be attractive to you (we are not mentioning the items generally not applicable to apartment owners): 

  • You sign a lot of agreements in the maintenance of your property, and it is likely you have signed some documents unknowingly naming another person or entity as an additional insured under your liability insurance protection policy. A Blanket Additional Insured endorsement can be a couple hundred dollars under many of these un-endorsed policies, but as long as your agreements are in writing, with the blanket endorsement you have coverage automatically under many broadening endorsements.
  • Often, the reimbursement for removing Debris from a damaged property can exceed the automatic grant. Many broadening endorsements increase the amount Debris Removal reimbursement available to you. 
  • Business Income (your loss of rental income coverage following an insured claim that displaces your tenant) is generally limited to 12 months unless you purchase increases in the time frame allotted to claim this benefit.  If a fire, for instance, is severe, you may need more than 12 months of coverage.  As broadening endorsements continue to become popular once again (was the rage of the 80’s in insurance), you can secure anywhere from and additional 3 months or more of an automatic extension of time to claim your loss of rents. 
  • This will sound very incidental, but coverage for Incidental Medical Malpractice for bodily injury or mental anguish is often found as an addition to the policy under these broadening endorsements.  Don’t overlook the implications that can arise on your premises for unattended or disinterested responses to injuries that may occur on your property. 
  • Loss or Damage to Tenant’s Autos, as a coverage grant, eliminates a lot of unnecessary arguments with tenants.  Damage just needs to be a result of a covered loss. 
  • Your liability protection will exclude bodily injury or damages to others’ property if that injury or damage is expected or intended.  That is one of your basic pillars of liability insurance; so, if you intend to cause harm, you are on your own!  However, this can get create coverage confusion in incidents wherein you or your representatives are simply protecting yourselves; thus, using Reasonable Force to protect yourself is covered if endorsed onto a policy, and this additional language is very often found in broadening endorsements. 
  • Tenant Personal Property coverage is occasionally seen in these broadening forms. Tenant Personal Property coverage offer typically $10,000 in coverage for the tenant’s property which may be damaged in a covered loss; often, the primary expense is the “pack-up” expenses associated with removing the tenants belongings from the premises so repair work can be completed. This is a very valuable additional coverage particularly if the tenant doesn’t have a renters policy; we have seen situations where uninsured tenants will not remove their property because they do not have renters insurance, and this really slows down the repair process.  
  • Tenant Move Back Expense coverage is another coverage often coupled with the tenant personal property coverage.  Broadening forms will often provide an additional $10,000 in the cost to store and bring back the tenant property to your unit once the covered damages are repaired. The intent of these two coverage grants is to keep your tenant with you and relieve you having your property sit idly while you are searching for another tenant.        
  • Water Back-up and Overflow is an often, over-looked coverage and one that property owners will decline so as to save money and enhance cash flow. This can be a problem. We are seeing more and more claims where vegetation’s roots are invading the out-going sewer lines and eventually blocking them.  One flush and the toilet bowl removes the water and waste; the next flush and the bacteria-filled water is coming back and up through your toilet and into your bath and bedroom and often into the family room. The cost to clean up this mess and remove the bacteria is often as great as the damage to your flooring and walls which is caused by the water back-up.  This is great coverage and worth the price of the broadening forms alone.  We are also seeing larger and larger limits being offer, up to $50,000 or more in many cases. 

These are just the highlights of the forms’ offerings.  Ask your agent about these forms, or as you are shopping for insurance, be sure to ask about broadening endorsements which will enhance your coverage tremendously yet do so at an affordable cost to you.  

PS:  We mentioned that the insurance companies will want something in return for these broadening forms, which usually comes in the form of maintenance updates and upgrades. That will be the subject of our next article!