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Insurance and Warranty Mitigation Strategies

13 minPRO
4/6

Key Takeaways

  • Environmental liability insurance ($2,500-$10,000/year) provides essential coverage for properties with Phase I findings.
  • Commercial equipment warranties provide budget certainty for aging HVAC and mechanical systems at $500-$800/unit/year.
  • Seller indemnification is only as valuable as the seller's financial capacity to honor the obligation.
  • Escrow holdbacks (5-10% of purchase price for 6-12 months) provide funded protection independent of seller solvency.
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Test Your Knowledge

1.What specialized insurance product covers defects discovered after closing?

2.What is a seller indemnification clause?

3.When is an escrow holdback preferable to seller indemnification?