Realty & Real Estate Insurance Packages

Real estate isn't one risk. An owner's biggest exposure is the building and the rent it produces. A property manager's is the advice they give and the trust money they hold. A brokerage's is the transaction. Many firms play more than one role, and the program has to follow every one of them.

For owners of plazas, office buildings, industrial units and mixed-use properties, the property policy carries most of the value at risk. Three settings decide whether it pays properly after a serious loss.

Our commercial property insurance guide explains limits, coinsurance and valuation in detail, with a worked example.

Apartment buildings, rooming houses, student rentals and short-term rentals are written by insurers as habitational risks, a class with its own underwriting appetite. Water damage drives much of the claims activity, and insurers look closely at the age of plumbing, electrical and heating systems, the tenant profile and how the building is managed.

Appetite varies widely between insurers. Some avoid student housing or short-term rentals altogether, while specialist markets write them on purpose. That is where comparing a wide panel matters most. See student housing, condo rental and Airbnb insurance for the specific classes.

In a multi-tenant building, a large share of the owner's risk sits with tenants: the restaurant's fryer, the auto shop's paint booth, the retailer's wet entrance. The lease is where that risk is transferred, and the tenants' insurance is how the transfer gets paid for.

A lease clause means little if the tenant's policy lapsed two years ago. Collect certificates of insurance every year, and tell your broker before signing a higher-hazard tenant, because one tenant can change the rate for the whole building. Our post on the commercial lease insurance clause covers the wording from the tenant's side.

Property managers act for owners: choosing tenants, approving repairs, collecting rent and holding deposits and reserve funds. Every one of those functions can produce a claim when an outcome disappoints the owner, a tenant or a condo board.

The core of a manager's program is professional liability (E&O) for negligent acts, errors and omissions in the services provided, and commercial crime coverage for the trust money in their care, including employee theft and funds-transfer fraud. Most managers also need CGL for the time their staff spend on site, and cyber coverage for tenant and owner data.

Regulation shapes the program too. In Ontario, condominium managers are licensed by the Condo Management Regulatory Authority of Ontario, and managers who lease property on an owner's behalf may fall under the Trust in Real Estate Services Act, 2002. Check which regime applies to your services, because it can set insurance and trust-account requirements.

In Ontario, every real estate registrant must take part in the professional liability insurance program administered by the Real Estate Council of Ontario (RECO), which provides errors and omissions, commission protection and consumer deposit coverage. Other provinces run their own mandatory programs through their regulators.

The mandatory program is a floor, not a full program. Brokerages commonly add:

In Ontario, the Condominium Act, 1998 requires a condominium corporation to insure the units and common elements against major perils, at replacement cost. The declaration and by-laws decide how far that extends into units, usually through a standard unit definition, and how the corporation's deductible can be charged back to an owner whose unit caused the loss.

Board members make decisions about reserve funds, repairs, contractors and owner disputes, and they can be sued personally for those decisions. Directors' and officers' liability protects them. A complete condo program also includes CGL for the common elements, equipment breakdown for elevators, boilers and HVAC, and fidelity coverage for the corporation's funds.

Unit owners still need their own condo unit policy for contents, improvements beyond the standard unit, liability and deductible assessments. A clear insurance section in the owners' information package prevents most of the disputes we see after a loss.

A building under construction is a different risk from a finished one. Builder's risk insures the project itself, along with materials on site and in transit, against fire, theft, vandalism and weather until completion. Larger projects often add delay in start-up coverage for the rent or interest lost when an insured loss pushes back completion.

Liability is usually arranged as a project-specific wrap-up policy covering the developer, general contractor and subcontractors for the project and a completed-operations period after it. Environmental liability matters on brownfield sites and redevelopments. Once the building is occupied, the program converts to a permanent property and liability placement, and the handover date is a gap to plan for.

Most property policies restrict coverage once a building is vacant beyond a set period, commonly 30 consecutive days, and a major renovation or a change of tenant can be a material change the insurer must be told about. Owners waiting on a new tenant or selling a building need a plan before the deadline, not after a loss.

Our guide to how the 30-day vacancy clause works covers the wording and the steps that keep an empty building insured. Where a building will sit empty for a long period, a dedicated vacant property policy is often the right answer.

Property premiums are priced per $100 of insured value, using what underwriters call COPE: construction, occupancy, protection and exposure. For a portfolio, the riskiest occupancy and the oldest building systems often set the tone for the whole account. Professional coverages for managers and brokerages are priced on revenue, transaction volume, services and claims history.

Market conditions currently favour buyers. Marsh's Global Insurance Market Index put Canadian commercial property rates down 8% in the third quarter of 2026, the steepest fall of any major line. Severe weather is pulling the other way: insured severe-weather losses in Canada topped $2.4 billion in 2025, according to CatIQ figures released by the Insurance Bureau of Canada. A soft market is the time to correct limits, add missing coverages and consolidate locations on better terms.