insurance – Page 4 – Retail Real Estate Law Ruminations

If You Don’t Understand It, Don’t Pretend You Do: Builder’s Risk Insurance (Part 2)

April 12, 2015 By Ira Meislik 1 Comment

The take-away from last week’s Ruminations posting was supposed to be that if you really don’t understand “insurance,” align yourself with someone who does. Not doing so is like cutting and pasting text from a foreign language document hoping that is says what you’d like it to mean. If that point didn’t come across last week, perhaps this second part on the topic of “Builder’s Risk” insurance will push readers into finding an insurance mentor.

Last week, we wrote about policy forms for builder’s risk insurance and how there is really no standard form. We also wrote about who could and should be covered. Those who read last week’s posting would have seen some thoughts about what property is covered, what is not, and what can be added to the coverage. If you missed that, click HERE to see what was said. You’ll also see some thoughts about some additional coverages that can be included along with the basic coverages under the builder’s risk typical policy. So, that will be our launching point. [Read more…]

Is It Enough To Write: “X Must Also Carry Builder’s Risk Insurance”? – A Rhetorical Question

April 5, 2015 By Ira Meislik 1 Comment

After re-reading today’s blog posting, Ruminations became more convinced than ever that its only real purpose is to scare all of us out of thinking we agreement writers know about how to write insurance provisions that really work. For people who don’t “do” insurance every day, reading about how to “do” insurance is like reading about how to juggle swords. Unless you really, really, deeply, deeply understand what can and can’t be done with insurance policies, leave it for professionals. That’s not to say that, working with insurance professionals, one can’t get some pretty decent “stock” provisions, but those are rarely the ones one finds in almost anyone’s form lease, mortgage or other agreement. Also, if a person who writes a lease, mortgage or other agreement doesn’t understand the insurance provisions in their own document, why are they putting them in there? [Read more…]

Filed Under: Buying and Selling Properties, Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: Agreements, Contracts, Drafting, insurance, Landlords, leases, mortgages, negotiation, retail real estate law, Tenants

What Kind Of Help To A Tenant Is Self-Help? Part 2

October 5, 2014 By Ira Meislik 1 Comment

Last week, we opened the topic of tenant self-help rights. We’re not going to do much repetition. So, if you haven’t seen it yet or, if you are like us, you’ve forgotten most of what you’ve read, click HERE to see that posting.

In that posting, we gave some examples of when a tenant with the right to do what its landlord should have done, won’t. In short, a tenant occupying one percent of a property isn’t very likely to plow an entire parking lot or replace a lot of roof area. That caveat doesn’t make the tenant’s self-help right entirely useless. Not all tasks are so extensive or expensive. Here are easy examples: a manageable roof leak or a rooftop HVAC replacement (in each case, assuming the landlord had responsibility to take care of those items). [Read more…]

Filed Under: Retail Leases, Retail Real Estate Law Tagged With: Agreements, Contracts, Drafting, insurance, Landlords, leases, negotiation, remedies, retail real estate law, Tenants, waivers

Why Should Anyone Care If They Don’t Know What Constitutes An Insurable Interest In Property?

July 21, 2014 By Ira Meislik 1 Comment

It isn’t intuitive whether someone has an “insurable interest” in someone else’s property, but without one, an additional insured or loss payee will not see any money from that insured’s property insurance policy. This subject, admittedly, is a “little” arcane. So, we’ll try to explain is by way of a story, actually a court’s decision.

There is a lesson to be learned from a recent Bankruptcy Court decision where, most uncharacteristically, the court ruled against the bankrupt estate. Somewhat surprisingly, but probably correctly, it held that a bankrupt tenant’s landlord “owned” the insurance proceeds and took that money out of the reach of the debtor or its other creditors.

Yes, the landlord got to keep the insurance proceeds from insurance the tenant purchased to cover the tenant’s personal property. [Read more…]

Filed Under: Retail Leases, Retail Real Estate Law Tagged With: Agreements, Contracts, Drafting, insurance, Landlords, leases, negotiation, Tenants

Crystal Balls And New Solutions To Fire And Condemnation Shortfall Issues

May 11, 2014 By Ira Meislik Leave a Comment

Our plan for today is to bring some insurance information to the attention of the readers of Ruminations and quickly move on to the rest of our day. So, here’s a warning. Today’s posting will be of immediate interest to a handful (if that) of our thousands of weekly readers. On the other hand, almost all readers will have heard of this first by continuing on, and we’re sure that, as these products are developed, they will solve more and more common problems. Pretty mysterious, huh?

Let’s give this pretty newish insurance coverage a name: “Gap Insurance.” Granted, we’ve borrowed that name from the automobile leasing industry, but the name will prove to be pretty descriptive (after we’ve described the product). Some in the insurance industry are using that moniker as well. [Read more…]

Filed Under: Buying and Selling Properties, Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: Agreements, Condemnation, Drafting, Eminent Domain, Fire, insurance, Landlords, leases, lenders, mortgages, negotiation, retail real estate law, Tenants

Write It Right In The First Place – It’s Not A Game Of Chance: Insurance, Good Faith, Fair Dealing.

March 16, 2014 By Ira Meislik Leave a Comment

Last week, for a “nugget” of wisdom unrelated to the substance of the dispute, we cited the decision in Boston Market Corporation v. Hack. This is an unpublished New Jersey appellate decision that can be seen by clicking HERE. We’ve known about this case for six years and that wrongly made us think, subconsciously, so did everyone else. Well, we’ve woken up to the reality and thought this week would be a good chance to “share.”

On a superficial level, this is an insurance coverage case – an allegation by a landlord that its tenant wasn’t carrying the required insurance coverage. A simple factual understanding can be gleaned from these words from the court itself: “The central dispute involves the proper interpretation of the parties’ lease agreement and, more particularly, whether the insurance obtained by [the tenant], with high deductibles of up to one million dollars, constituted self-insurance or no insurance at all… .”

Peeling back some layers reveals that it is also about the implied covenant of good faith and fair dealing, about what happens after a purported breach may be used to analyze the purported breach, and about how those who don’t understand a substantive subject shouldn’t be drafting documents that rely on what they don’t really understand. [Read more…]

Business Interruption Coverage Too Complicated To Understand? Almost, But Not Quite.

November 3, 2013 By Ira Meislik 2 Comments

Last week, we promised to tell our readers more about what we reluctantly refer to as “Business Interruption Insurance.” We say, “reluctantly,” because it’s not a term you’ll find in an insurance policy – it may have been in years gone by, but now it is a business concept. So, that will be our jumping off point.

We’ll begin with a caveat or disclaimer. Today’s posting will be useless to anyone who is seeking to buy coverage. This form of coverage is conceptually simple but, in application, it is exceptionally complicated. That’s why insurance professionals were invented. Our goal is to get leasing and lending professionals to understand the “what’s” and “why’s” of “business interruption insurance,” not the “how’s.” Our objective to help non-insurance professionals “know what is going on,” not to turn readers into experts. Too many of us who are “doing deals” insist on asking for insurance coverages that don’t exist. Too many of us ask for insurance coverages that make no sense. And, too many of us don’t ask for insurance coverages that are really needed in the context of our deals. [Read more…]

Business Interruption Insurance Principles For Real Estate Dummies

October 27, 2013 By Ira Meislik 1 Comment

We’ve just returned from the International Council of Shopping Centers Law Conference in San Diego. The “hot topic” this year seemed to be “insurance,” and the “hot sub-topic” seemed to be “business interruption insurance.” To some, that means “rent insurance.” In May, we wrote: “What Would Rent Insurance Be If There Were Such A Thing?” You can see that blog posting: HERE. Basically, “rent insurance” is a colloquial term for a major “element” of Business Interruption Coverage, which, itself, is a colloquial term for “Business Income” coverage, which is what the appropriate forms are titled. [Read more…]

Filed Under: Buying and Selling Properties, Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: Agreements, Business Interruption, Contracts, Drafting, insurance, Landlords, leases, lenders, mortgages, retail real estate law, Tenants