Insurance Cost vs Building Construction Quality...

Does it matter what I build my commercial building out of...

So your business is booming and you need to build a new building to accommodate this growth. One questions comes to mind; How is the cost for insurance associated with the construction quality?

Insurance Cost vs Building Construction Quality

Simply put, the better construction (higher ISO rating) of your building results in better insurance premiums.


ISO Types 1-6: Construction Code Descriptions

ISO 1 – Frame (combustible walls and/or roof) Class 1B Buildings where the exterior walls are wood or other combustible materials, including construction where the combustible materials are combined with other materials such as brick veneer, stone veneer, wood iron-clad and stucco on wood. Wood frame walls, floors, and roof deck Brick Veneer, wood/hardiplank siding, stucco cladding

Wood frame roof with wood decking and typical roof covers below: *Shingles *Clay/concrete tiles *BUR (built up roof with gravel or modified bitumen) *Single-ply membrane *Less Likely metal sheathing covering *May be gable, hip, flat or combination of geometries

 Roof anchorage *Toe nailed *Clips *Single Wraps *Double Wraps

 Examples: Primarily Habitational, max 3-4 stories


ISO 2 – Joisted Masonry (JM) (noncombustible masonry walls with wood frame roof) Class 2B Buildings where the exterior walls are wood or other combustible materials, including construction where the combustible materials are combined with other materials such as brick veneer, stone veneer, wood iron-clad and stucco on wood. Concrete block, masonry, or reinforced masonry load bearing exterior walls *if reported as CB walls only, verify if wood frame (ISO 2) or steel/noncombustible frame roof (ISO 4) *verify if wood frame walls (Frame ISO 1) or wood framing in roof only (JM ISO 2) Stucco, brick veneer, painted CB, or EIFS exterior cladding Floors in multi-story buildings are wood framed/wood deck or can be concrete on wood or steel deck.

 Wood frame roof with wood decking and typical roof covers below: *Shingles *Clay/concrete tiles *BUR (built up roof with gravel or modified bitumen) *Single-ply membrane *Less Likely metal sheathing covering *May be gable, hip, flat or combination of geometries

 Roof anchorage *Toe nailed *Clips *Single Wraps *Double Wraps

 Examples: Primarily Habitational, small office/retail, max 3-4 stories

 If “tunnel form” construction meaning there is a concrete deck above the top floor ceiling with wood frame roof over the top concrete deck, this will react to wind forces much the same way as typical JM construction. It is slightly better from a fire rating standpoint and from a wind standpoint in terms of potential damage if the wood frame is damaged. Please provide comments in the construction details of SOV for this type of construction.

 A subset of JM Construction is Heavy Timber Joisted Masonry JM Class II, also known at ISO 7 (Class 7AB). This is Joisted Masonry constructed buildings where the following additional conditions exist: Where the entire roof has a minimum thickness of 2 inches with Roof Supported by timber and having a minimum dimension of 6 inches, or where the entire roof assembly is documented to have a UL wind uplift classification of 90 or equivalent.

ISO 3 - Non Combustible (NC) Class 3B / NC-I (non-combustible) Buildings where the exterior walls and the floors and roof are constructed of and supported by metal, asbestos, gypsum or other non-combustible materials. Minimal combustible materials in the building construction Typical steel frame walls with masonry in-fill, brick veneer, metal sheathing, EIFS. Steel framing is load bearing portion of the building frame. AMBS (all metal building system) pre-engineered construction is common. Light steel frame ISO 3 smaller geometry with no interior building support columns. Heavier ISO 3 larger geometries with internal support columns and heavier roof framing. If multi-story, floors are commonly concrete on steel frame on steel deck.

 Roof deck and roof cover systems:
 *Steel deck -BUR (built up roof with gravel or modified bitumen) -Single-ply membrane -Lesser extent foam/spray applied roof which is typically applied over an existing roof cover – this is not considered a roof cover replacement. -Usually flat/low sloped
 *Metal -Lap seam metal panel (exposed fasteners) -Standing seam metal panel (concealed fasteners) -May or may not be coated/sealed -May be gable, hip, flat or combination of geometries

 Roof anchorage: *Light steel frame ISO 3 may still incorporate clips, single wraps, or double wraps *Because of heavier construction with no wood framing in roof, roof to wall anchorage is typically an engineered bolted and/or structural roof connection. Toe nailing, Clips, single wraps, double wraps do not apply.

 Examples: warehouses, manufacturing facilities
A subset of NC Construction is Superior Non-Combustible Construction NC-II, also known as ISO 8 (Class 8AB). This shall apply to Non-combustible constructed buildings where the following additional conditions exist: Where the entire roof is constructed of 2 inches of masonry on steel supports; or, where the entire roof is constructed of 22 gauge metal (or heavier) on steel supports; or, where the entire roof assembly is documented to have a wind uplift classification of 90 or equivalent.

ISO 4 - Masonry Non Combustible (MNC) Class 4AB / MNC-I Buildings where the exterior walls are constructed of masonry materials as described in code 2 above, with the floors and roof of metal or other non-combustible materials. Concrete block, reinforced masonry, tilt-up concrete load bearing walls – may be combined with some heavy steel framing. Floors commonly concrete on steel deck for multi-story buildings. Roof construction is typically heavy steel frames.

 Roof deck and roof cover systems:
 *Steel deck with insulation boards (commonly called insulated steel deck roofing system) -BUR (built up roof with gravel or modified bitumen) -Single ply membrane -Lesser extent foam/spray applied roof which is typically applied over an existing roof cover – this is not considered a roof cover replacement. -Flat/low sloped
 *Lightweight insulating concrete or gypsum board on steel deck
 -BUR (built up roof with gravel or modified bitumen)
 -Single ply membrane
 -Lesser extent foam/spray applied roof which is typically applied over an existing roof cover
– this is not considered a roof cover replacement.
-Flat/slow slope -Sometimes possibly heavier concrete on steel deck or precast concrete panels for roof frame may still be considered ISO 4 if exposed steel is not fire proofed to obtain fire ratings needed to be ISO 5.
 *Steel frame with metal sheathing roof cover -Lap seam metal panel (exposed fasteners) -Standing seam metal panel (concealed fasteners) -May or may not be coated/sealed -May be gable, hip, flat or combination of geometries

 Roof anchorage
*Because of heavier construction with no wood framing in roof, roof to wall anchorage is typically an engineered bolted and/or structural roof connection. Toe nailing, Clips, single wraps, double wraps do not apply.
 Walls have minimum 1 hour fire rating

 Examples: shopping centers, strip centers, office buildings, warehouses, schools
A subset of MNC Construction is Superior Masonry Non-Combustible Construction MNC-II, also known as ISO 9 (Class 9A). This shall apply to Masonry Non-combustible constructed buildings where the following additional conditions exist: Where the entire roof is constructed of 2 inches of masonry on steel supports; or, where the entire roof is constructed of 22 gauge metal (or heavier) on steel supports; or, where the entire roof assembly is documented to have wind uplift classification of 90 or equivalent.

ISO 5 - Modified or Semi Fire Resistive (MFR or SFR) Class 5A
 Overall construction of fire resistive materials with fire rating less than 2 hours but greater than 1 hour. Exterior walls, floors and roof deck typically of masonry materials not less than 4 in thick but less thick than required for the 2 hour minimum rating for fire resistive construction. Protected steel and/or concrete or heavy masonry walls and floors. Semi wind resistive

 Roof deck and roof cover systems
 *Heavy steel frame with concrete poured on steel deck -BUR (built up roof with gravel or modified bitumen) -Single ply membrane -Lesser extent foam/spray applied roof which is typically applied over an existing roof cover – this is not considered a roof cover replacement. -Flat/low sloped -Exposed steel must be fireproofed to achieve required fire rating
 *Precast concrete (PC) panels -BUR (built up roof with gravel or modified bitumen) -Single ply membrane -Lesser extent foam/spray applied roof which is typically applied over an existing roof cover – this is not considered a roof cover replacement. -Flat/low sloped
 *Steel deck with insulation boards, gypsum, lightweight insulating concrete -BUR (built up roof with gravel or modified bitumen) -Single ply membrane -Lesser extent foam/spray applied roof which is typically applied over an existing roof cover – this is not considered a roof cover replacement. -Flat/low sloped -Exposed steel must be fire proofed to achieve required fire rating. 

Roof anchorage
*Because of heavier construction with no wood framing in roof, roof to wall anchorage is typically an engineered bolted and/or structural roof connection. Toe nailing, Clips, single wraps, double wraps do not apply. .
 Examples: high and mid-rise office buildings and condos

ISO 6 - Fire Resistive (FR) Class 6A
Fire rating not less than 2 hours for walls, floors, and roofs. This typically requires walls of masonry materials minimum of 4 in thick, hollow masonry minimum 8 in thick, floors and roofs minimum of 4 in thick reinforced concrete, and any structural steel load bearing components with minimum of 2 hour fire rating, Reinforced Concrete Construction building frame and floors and/or very well protected steel and concrete Floors are minimum 4" cast in place concrete, precast concrete or concrete on protected steel Wind resistive Precast construction - brought in from elsewhere / Cast in Place is poured on site

 Roof deck and roof cover systems
 *Cast in place reinforced concrete or precast concrete
 -BUR (built up roof with gravel or modified bitumen)
 -Single ply membrane
 -Lesser extent foam/spray applied roof which is typically applied over an existing roof cover
 – this is not considered a roof cover replacement
 -Flat/low sloped -In some cases, structural concrete poured on steel deck, but exposed steel must be fireproofed to achieve required minimum 2 hour fire rating
 -If exposed concrete, such as on parking deck, leave roof cover as Unknown on SOV. This is typically an exposed or sealed concrete roof deck and the ISO 5 or 6 construction and occupancy will account for the roof deck/cover type. Can provide construction comment on SOV.

 Roof anchorage *Because of heavier construction with no wood framing in roof, roof to wall anchorage is typically an engineered bolted and/or structural roof connection. Toe nailing, Clips, single wraps, double wraps do not apply.
Examples: high-rise office buildings and condos, parking garages

Michael Fillers, CPIA, NFIP
Morris Insurance Agency, LLC

3032 Dauphin Square Connector

Mobile, AL 36607

D.251-473-5119/F.251-473-6301/C.251-753-8011

Email: mjfillers@morrisinsmobile.com

Web: www.MorrisInsMobile.com

How I met JESUS in the flesh and HE saved me:

WRITTEN - http://mjfillers.blogspot.com/2014/09/how-i-met-jesus-and-he-saved-me.html

AUDIO - https://soundcloud.com/michael-fillers/michael-fillers-testimony-hot-dogs-at-the-hank-05-14-2015

Matt 24:46-47-"Blessed is he whom his master will find at work when he arrives. Truly I tell you, he will put that one in charge of all his possessions."

some of the above info is an excerpt from: http://www.amrisc.com/Amrisc%20pdfs/CompleteSOV/ISOTypesDescriptions.pdf

CONDO'S AND WATER DAMAGE: Water Leaks in and then the "WHO IS AT FAULT" starts..

Water Leaks in Who Fixes; Who Pays, 

By: John Cottle, Esq., Becker & Poliakoff Condominiums 


Water is life’s most basic necessity. It makes up about sixty percent of our body weight and must constantly be replenished, thus civilizations need reliable sources of water to survive. A perfect example is ancient Rome, which thrived and prospered by engineering a complex system of aqueducts that collected water from distant locations and moved it to Rome’s outlying cities and towns. Life is no different today. Water is still collected, stored and moved from place to place to meet the people’s need. However, it is the storing and moving of this essential resource that can prove problematic. When water unexpectedly escapes the vessels and pipes designed to contain it, damage frequently follows. And, in the context of condominiums the problems stemming from unwanted water are often magnified. The escaping water can migrate from unit to unit, doing damage to the property of numerous owners within a brief time span.

To further complicate matters, the maintenance and insurance responsibilities are divided between unit owners and condominium associations. So there may be no area of condominium law more befuddling to owners, and indeed even to licensed community association managers and attorneys, as the question of who is responsible for the damage caused by water intrusion in a condominium. The duties and liabilities are not always clear, and the proper method of analyzing liability can be confusing and elusive. There are, however, a few principles that if properly applied, will clarify the issues of responsibility for water damage.

Let’s examine them. A good place to begin is to determine whether the unwanted water resulted from a maintenance issue or a casualty event. A slow-leaking pipe that does damage over an extended time period is a maintenance issue. Wind driven rain from a major storm is a casualty event. But, what about a 20-yearold water heater that rusts through and suddenly fails, flooding an entire stack of condominium units below? While the failure to replace an aging water heater is certainly a maintenance issue, this event will be considered a casualty due to the immediate and unanticipated damage that ensues. It is the sudden and unexpected nature of an event that causes it to be characterized as a casualty.

 If the damage was caused by a maintenance issue, we must look to the condominium documents to determine who is responsible for the repair costs. Assume we have drywall within a unit that was damaged over time by a persistent water leak. This is a clear maintenance issue. Depending upon how the condominium documents are worded, the drywall could be a part of the unit or a part of the common elements of the condominium. If a common element, the maintenance responsibility will fall on the condominium association. If a part of the unit, responsibility will usually, but not always, fall on the unit owner. Condominium documents sometimes require the association to maintain portions of the unit, so the documents must be consulted to determine where responsibility lies. Note that it does not matter whether the damaged drywall is within the unit where the leak originated or in a unit below the leak. Responsibility for repair lies with the owner of the damaged unit, unless the condominium documents impose that obligation upon the association.

If the damage was caused by casualty, the next question to ask is who insures the damaged property. In Florida, responsibility for repairing and restoring property damaged by casualty rests with the party who insures it. Who insures what part of a condominium is not determined simply by whether the element in question is a part of the unit or a part of the common elements. Florida statutes requires that a condominium property insurance policy must cover “[a]ll portions of the condominium property as originally installed,” except for, “all personal property within the unit ... floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components.” (See, §718.111(11), Fla. Stats.)

Thus, if we return to our example of damaged drywall and assume this time that the damage was caused by a casualty event, the responsibility for repair will lie with the association that insures it. It does not matter whether the drywall is a part of the unit or part of the common elements—if it is a part of the original construction, it is insured by the association, and the association is therefore responsible for it. Conversely, responsibility for repair or replacement of floor covering and cabinetry will lie with the unit owner. It is certainly logical, on the face of things, for the party collecting the insurance proceeds to shoulder the burden of the repairs. But what if an insurance claim for damaged drywall does not meet the association’s deductible? Is the association still responsible? In Florida, the answer is yes, and this is true even if the governing documents provide otherwise. The only way to shift the loss back to the unit owner is through an owner vote to opt out of this statutory requirement. The statute requires that a majority of the total voting interests of the condominium must approve the opt out in order for it to be effective..

Otherwise, the association is obligated to repair anything that it insures, regardless of whether it ever collects a dime of insurance proceeds. Quite often, water damage in a condominium is the result of someone’s negligence: an owner fails to replace an old water heater; a maintenance man incorrectly installs an ice maker; spring breakers allow a bathtub to overflow. Water escapes the unit and damages other units and common elements below the source of the leak.

How does this negligence affect the analysis of who must pay for the repairs? It is important to remember that negligence is secondary to the issue of who is initially responsible for repairing the damage, and the possibility that the damage may have been caused by negligence does not change that part of the analysis. However, the presence of negligence may allow the party saddled with the repair responsibility to recover his losses.

Thus, if Ms. Pent-House’s 20-yearold water heater bursts and floods the five units immediately below, those five unit owners may have claims against her for the damage to their draperies, cabinets, and priceless Turkish carpets. Likewise, the association may have claims for damage to the drywall and other affected elements that it insures. Hopefully, Ms. Pent-House carries adequate liability insurance. While dissecting the responsibility for repair of water damage in a condominium, context can sometimes seem tricky, the above roadmap should prove a useful tool. If you have the misfortune of suffering significant damage from a condominium water leak, it would be wise to consider consulting with legal counsel. Meanwhile, ask yourself these questions: do you know how old your water heater is and do you have adequate liability coverage? ■

Michael Fillers, CPIA, NFIP
Morris Insurance Agency, LLC

3032 Dauphin Square Connector

Mobile, AL 36607

D.251-473-5119/F.251-473-6301/C.251-753-8011

Email: mjfillers@morrisinsmobile.com

Web: www.MorrisInsMobile.com

How I met JESUS in the flesh and HE saved me:

WRITTEN - http://mjfillers.blogspot.com/2014/09/how-i-met-jesus-and-he-saved-me.html

AUDIO - https://soundcloud.com/michael-fillers/michael-fillers-testimony-hot-dogs-at-the-hank-05-14-2015

Matt 24:46-47-"Blessed is he whom his master will find at work when he arrives. Truly I tell you, he will put that one in charge of all his possessions."

ORIGINAL ARTICLE:
http://www.becker-poliakoff.com/Files/6012_20130501_cottle_condo_owner.pdf

Stuff YOU need to KNOW about LRO..... (Lessors Risk Only Insurance)

LESSOR'S RISK INSURANCE for Investors & Real Estate Professionals...

Now that you have commercial property, it is time for some LRO coverage.

Lessor's Risk Only Insurance (aka LRO, Lessor's Risk, or Landlord Insurance) is a type of commercial insurance designed for those who own and lease building space to individuals and businesses. It can address the building owner's lawsuit expenses if a lessee or customer of the lessee sustains bodily injury or property damage while on the owner's property and sues over it.

In other words, if you're a commercial landlord you probably want this coverage to protect your assets and address the unique risks that come with maintaining tenants. Let's review what we mean when we talk about "lessors" and how the Lessor's Risk Only policy works.

What Is a Lessor and Why Do They Have Risk?

In a Lessor's Risk Only Insurance policy, a lessor may be any building owner who leases out at least part of their building to a tenant or lessee. A lessor can be liable if a lessee, lessee's employee, or lessee's customer suffers…

• Bodily injuries while on the building owner's property.
• Property damage while on the property.

For example, imagine you rent out space to a retail store in your building. While exiting the store, a customer slips on a patch of ice just outside the door and is seriously injured. Is the store liable for their medical costs or are you, the building owner?

It may depend on your contract with the store owner, but Lessor's Risk Insurance can help pay for legal expenses if the customer or the store owner sue you for damages.

Lessor's Risk Insurance can also address property damage costs, such as repairing vandalism and replacing stolen property. For instance, if the retail store in the example above is vandalized one night, the store owner may blame you for not protecting the building or providing adequate security. They may allege you're responsible for paying the repair and cleanup costs. Your LRO policy may help cover this type of claim.

Are You Eligible for Lessor's Risk Insurance?

Typically, Lessor's Risk Insurance…

• Is available to building owners who lease their entire building.
• Is sometimes available to those who occupy less than 75 percent of their building and lease out the remainder.
• May be available for apartment building owners, but generally is meant for those who lease to commercial tenants, such as warehouses, retailers, and commercial offices.

Also worth noting: you may be required to carry Lessor's Risk Insurance in certain municipalities, so make sure to check out your local laws concerning landlord coverage.

How Lessor's Risk Insurance Works

Lessor's Risk Insurance acts similar to General Liability i nsurance in the sense that it addresses claims arising from third-party property damage and bodily injury. However, Lessor's Risk…

• Applies to liability claims brought by lessees or customers of lessees.
• Usually doesn't cover liability claims stemming from other third parties.

So say, for example, a handyman you hired is injured while doing maintenance on your building and makes a claim against you. You'd look to your General Liability policy to address the claim, not your LRO policy.

If you rent out apartments in your building, you should also know that a Lessor's Risk policy typically doesn't cover theft or damage to tenants' personal possessions. Your tenants are responsible for these items and should carry renter's insurance to protect them.

As a prerequisite for Lessor's Risk Insurance, you may need to require your tenants to carry their own insurance policies. When your tenants have their own General Liability and Property policies, you get an extra layer of risk protection. For example, when a tenant's visitor is hurt in your tenant's space, they may simply sue the tenant and not you to recover damages.

Of course, each insurance provider has different requirements for LRO coverage, so be sure to ask your insurance agent about your obligations.

To sum it all up: Lessor's Risk Insurance is an important risk management tool for landlords and can address some lessees' liability claims. Know your coverage details and ask your agent if you need clarification about your policy. With adequate coverage, you may keep costly claims from bankrupting you and forcing you to sell your assets, including the building you lease.

if you have any other questions, feel free to call me.

Michael Fillers, CPIA, NFIP
Morris Insurance Agency, LLC

3032 Dauphin Square Connector

Mobile, AL 36607

D.251-473-5119/F.251-473-6301/C.251-753-8011

Email: mjfillers@morrisinsmobile.com

Web: www.MorrisInsMobile.com

How I met JESUS in the flesh and HE saved me:

WRITTEN - http://mjfillers.blogspot.com/2014/09/how-i-met-jesus-and-he-saved-me.html

AUDIO - https://soundcloud.com/michael-fillers/michael-fillers-testimony-hot-dogs-at-the-hank-05-14-2015

from: https://realestate.insureon.com/small-business-insurance/lessors-risk-only