Mixed-Use Building Insurance: What Investors Need to Know
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 13
- 2 min read
Mixed-use buildings offer strong investment potential, but they also come with complex risks. This blog explains what mixed-use building insurance covers, why it’s essential for investors, and how Wexford Insurance can help you protect your property and maximize returns.
What Is a Mixed-Use Building?
A mixed-use building combines two or more types of occupancy—typically residential and commercial—within a single property. Common examples include apartment units above retail stores, office spaces with ground-floor restaurants, or buildings that blend residential, retail, and office tenants.
These properties are popular among investors for their ability to generate multiple income streams and increase property value. However, they also present unique insurance challenges due to the variety of risks associated with different tenant types.
Why Mixed-Use Properties Require Specialized Insurance
Unlike single-use buildings, mixed-use properties have overlapping risk profiles. A fire in a restaurant could damage residential units above. A slip-and-fall in a shared lobby could involve both commercial and residential liability. Because of this, standard commercial or residential insurance policies often fall short.
Mixed-use building insurance is designed to address these complexities by combining multiple types of coverage into one comprehensive policy.
What Does Mixed-Use Building Insurance Cover?
A well-structured mixed-use insurance policy typically includes:
Covers physical damage to the building from fire, storms, vandalism, or other covered events.
Protects against third-party claims for bodily injury or property damage—essential for both residential tenants and commercial customers.
Business Interruption Insurance
Replaces lost rental income if a covered event forces tenants to vacate or close temporarily.
Equipment Breakdown Coverage
Covers HVAC systems, elevators, and other essential building equipment.
Flood and Earthquake Insurance (Optional)
Especially important in high-risk zones.
Crime Insurance
Protects against theft, burglary, and vandalism.
Depending on the tenant mix, additional coverages may be needed. For example, a restaurant tenant may require liquor liability, while a tech company may need cyber liability protection.
Factors That Affect Insurance Costs
The cost of insuring a mixed-use building varies based on:
Claims History: A clean record can help reduce premiums.
Location: Properties in high-risk areas (e.g., flood zones or urban centers) may have higher premiums.
Tenant Mix: Riskier tenants like restaurants or gyms can increase liability exposure.
Building Age and Construction: Older buildings or those lacking modern safety features may cost more to insure.
Coverage Limits and Deductibles: Higher limits and lower deductibles increase premiums but offer more protection.
Final Thoughts
At Wexford Insurance, we understand the unique challenges that come with insuring mixed-use properties. Our team works closely with investors to design customized policies that protect both residential and commercial components of your building. Whether you own a small storefront with apartments above or a large multi-use complex, we’ll help you find the right coverage at a competitive rate.
Contact Wexford Insurance today to get a personalized quote and protect your investment with confidence.
