Managing the various, often-volatile property and liability risks that commercial real estate owners and managers face daily requires a vigilant risk management strategy that includes frequently evaluating risks and assessing insurance programs to ensure proper coverages are in place. For instance, when it comes to estimating potential losses from such catastrophes as hurricanes and earthquakes, real estate companies are challenged by the inadequacy of modeling tools. The inherent low-frequency rate of catastrophic event also means standard actuarial techniques are not as effective. On the liability front, making sure policies align with contractual exposures requires a significant amount of due diligence combined with real estate risk management expertise. All of these challenges point to a greater need for real estate companies to partner with risk management experts that have a thorough understanding of the industry’s unique challenges. Additionally, companies need to stay informed on the changing risk environment and latest risk management techniques that can help to mitigate their financial exposures. Following are a few strategies addressing catastrophe property and liability exposures in real estate.
View entire article at National Real estate Investor.
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