Apartment building insurance for five units and up.
Commercial property, liability, loss of rents and umbrella coverage for California apartment buildings, packaged on a business owner’s policy where a building qualifies, and builder’s risk for units under construction.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed November 2026 · How this page is researched
Carriers look closely at older buildings
Buildings with five or more units are insured on commercial policies. Carriers weigh year built, construction, roof, electrical and plumbing updates, and seismic retrofits before they quote.
I present your building with the details underwriters ask for, so more carriers will look at it, then compare coverage and price side by side.
- BuildingThe structure insured to its replacement cost.
- Loss of rentsRental income lost while a covered loss is repaired.
- General liabilityInjuries to tenants and visitors in common areas.
- UmbrellaHigher liability limits above the building's policy.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- The building: address, units, stories and year built.
- Construction: wood frame, masonry or concrete.
- Updates: roof, electrical, plumbing and retrofit years.
- Rents: annual gross rental income.
- Current policy: declarations page and loss runs.
- Ownership: personally, trust or LLC.
Balcony and stair inspections under SB 721
California Health and Safety Code section 17973, from SB 721, requires inspection of exterior elevated elements on every building with three or more multifamily dwelling units. That means balconies, decks, porches, stairways, walkways and entry structures, with their supports and railings, that extend beyond the exterior walls, have a walking surface more than six feet above ground, and rely in whole or in substantial part on wood or wood-based products. Common interest developments are excluded.
The first inspection was due by January 1, 2026, under AB 2579 (Chapter 835, Statutes of 2024), which moved it back a year, then by January 1 every six years. If the permit application was submitted on or after January 1, 2019, the inspection is due within six years of the certificate of occupancy.
- Who can inspect: a licensed architect; a licensed civil or structural engineer; a contractor with an A, B or C-5 license and at least five years building multistory wood-frame buildings; or a certified building inspector or building official, as the local jurisdiction determines. The owner hires them; they can't work for the local jurisdiction while inspecting.
- Sample: at least 15 percent of each type of element.
- Report: to the owner within 45 days of the inspection. If an element poses an immediate threat, the inspector sends the report to the owner and the local enforcement agency within 15 days, and the owner must take preventive measures immediately. Blocking access until repairs are done counts.
- Other repairs: apply for a permit within 120 days of receiving the report, then finish within 120 days of permit approval unless the agency extends it. If repairs aren't done within 180 days, the inspector notifies the agency and the owner; if they're still open 30 days after that notice, a civil penalty of $100 to $500 a day applies, and a building safety lien can be recorded.
The statute requires keeping reports for two inspection cycles and delivering them to a buyer. Cities may add stricter rules. When I market a building, the report and repair sign-offs answer an underwriter's question before it's asked.
Loss of rents on CP 00 30: what to read for
IRMI describes rental value insurance as time element coverage for rental income lost when a rented building is damaged by a covered cause of loss, and notes it can be written on a business income form. If your commercial policy uses ISO's Business Income (and Extra Expense) form, CP 00 30, check these points. I'm citing the 10 12 edition; your edition or a carrier's own form may read differently.
- Which option the declarations show. The form offers Business Income including Rental Value, Business Income other than Rental Value, or Rental Value only. For apartments, the limit should sit on an option that includes Rental Value.
- What Rental Value includes. Net income from tenant occupancy, fair rental value of any part you occupy, and continuing normal operating expenses, including payroll and charges that are the tenants' legal obligation but would otherwise be yours.
- When the period starts. For Business Income, the period of restoration begins 72 hours after the direct physical loss.
- When it ends. On the date the property should be repaired, rebuilt or replaced with reasonable speed and similar quality. The policy's expiration date does not cut it short.
- Code-driven delays. The period of restoration does not include extra time required to comply with an ordinance or law regulating construction or repair.
- Re-leasing. Extended Business Income pays Rental Value loss after repairs, until tenant occupancy could be restored with reasonable speed or 60 consecutive days, whichever is earlier. The Extended Period of Indemnity option replaces the 60 with the number on the declarations.
Also check whether a Coinsurance percentage applies, or whether Maximum Period of Indemnity, Monthly Limit of Indemnity or Business Income Agreed Value is shown instead. For the building side, see commercial property insurance.
Apartment building insurance, answered
Is a 5-unit building insured differently than a 4-unit?
Usually, yes. Properties with one to four units can often be written on dwelling policies, while five or more units are generally written on commercial property and liability policies.
What is loss of rents coverage?
It pays rental income you lose while a covered loss is repaired, based on the policy's limit and terms.
Does a seismic retrofit help with insurance?
Completed retrofit work can matter to underwriters and to earthquake coverage options. Have the permits and completion documents ready.
Does my building policy cover tenants' belongings?
No. Tenants need their own renters insurance for their belongings and liability.
Can an apartment building go on a business owner's policy?
Often, if it's on the smaller side. ISO's businessowners program lists apartments among its eligible classes, and many carriers package the building, loss of rents and liability into one business owner's policy. Each carrier sets its own limits on size, age and construction, so larger or older buildings usually go on separate commercial property and liability policies. I check both ways.
What covers an apartment building while it's being built?
Builder's risk. It covers the structure and materials during construction, and the construction contract says whether the owner or the contractor buys it. The contractor's liability and workers' comp are separate. When the building is finished, the permanent property and liability policy takes over, so I line that up before tenants move in.
Does SB 721 apply to condos?
No. Health and Safety Code section 17973 doesn't apply to common interest developments. Condo associations follow SB 326, which the City of Oakland says required inspections by January 1, 2025, with repeat inspections every nine years.
Do you offer apartment building insurance outside California?
Yes. Clients across the country send the same quote form. Sam Alishahi is licensed in all 50 states and Washington, DC and places policies there directly. The shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.
Official sources
- California Health and Safety Code 17973 (exterior elevated elements), via California Public Law
- Digital Democracy (CalMatters): AB 2579, Inspections: exterior elevated elements, Chapter 835, Statutes of 2024
- City of Oakland: Inspections of Balconies, Decks, and other Exterior Elements
- City of Gilroy: Exterior Elevated Elements Inspections
- California Civil Code 1941 (landlord duty to repair), via California Public Law
- California Civil Code 1941.1 (untenantable dwelling), via California Public Law
- California Civil Code 1942.4 (rent and damages for uncorrected conditions), via California Public Law
- LADBS: Soft-Story Retrofit Program
- ISO CP 00 30 10 12 Business Income (and Extra Expense) Coverage Form (specimen copy)
- IRMI: Rents or rental value insurance
Send the building details. I'll shop it.
The address, unit count and your current declarations page are enough to start.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.
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