Protection may quickly be unattainable for multifamily actual property insureds to safe

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Jeremy Burr, VP of sales specializing in multi-family real estate transactions at the Insurance Office of America (IOA), described assault and assault — where a person uses their own body and/or some type of weapon to harm another person — as “ the most heinous type of loss that is really crushing the casualty side of our P&C sector”.

“Historically, general liability policies did not specify coverage for personal injury and battery protection, meaning there was no express coverage or exclusion for personal injury and battery,” Burr said. “But that has now changed with the hardening of the insurance market. While some carriers remain silent, others have introduced an Attack and Battery sub-limit. Instead of the $1 million per event coverage formerly offered through general liability insurance forms being implicit, coverage is now capped at $50,000 or $100,000 and so on. There are also carriers who have implemented specific exclusions for all personal injury and battery claims.”

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According to Burr, there are two key factors insurers use to create their positions regarding attack and battery exclusions. The first is historical claims experience, so any insured with a history of assault and battery damage or problems should at least expect coverage to be reduced to a sublimit or general exclusion of coverage.

“The second is a newly discovered use of crime metrics by insurers for geographic locations,” Burr told Insurance Business. “A broker says they have a client in a certain zip code or at a certain street corner or intersection and the insurers have the ability to go online and pull up crime numbers for that area and use various data points to determine how safe that community is. Of course, the more dangerous the community, the more likely it is that attacks and battery cover will be reduced or eliminated.”

There are certain things multi-family homeowners can do to reduce their risk of personal injury and personal injury. For example, Burr suggested hiring a security firm to monitor the risk, fencing and cordoning off the community, posting signage to warn of crime, deploying security cameras, and ensuring the property and surrounding area are well lit.

Unfortunately, the reality is that apartment building owners can be held liable for most incidents on their property, even if they involve criminal acts. A simple claim can involve a person entering an apartment building and attacking a occupant, and that occupant then sues the owner for failing to keep the building safe and secure.

“That type of claim makes sense,” Burr commented, “but we’ve even seen claims involving two people who don’t live on the property who might get into an altercation during a bad drug deal in the parking lot incident.” advice has been given and the property owner is being sued for lack of security.”

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Burr added that while many insureds would attempt to defend themselves in this scenario by pointing out the criminal nature of the act, it is often cheaper for the insurance carrier to pay settlement and resolve the situation outside of the court system, than he himself pays to actually take action against the claim. This difficulty in defending is another reason why attack and battery cover rates increase so much.

“I think that’s a trend that’s likely to gain momentum as we speak, unless there’s indemnity reform related to how our system works so that a landlord’s liability is limited,” Burr said . “I think not only will the market continue to harden or deteriorate in 2022, but there is a possibility, I think, that almost all properties will at some point not even be able to receive attacks and battery cover.”