Entrepreneurship & Small Business

SmallBus flood damage caused by next door tenant insurance headache

  • Last Updated:
  • Feb 6th, 2019 5:20 pm
[OP]
Deal Addict
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Mar 20, 2004
3662 posts
613 upvotes
Mississauga

SmallBus flood damage caused by next door tenant insurance headache

The cold snap we had in mid January + HVAC malfunctioned in the next door tenant of a small commercial plaza caused their sprinkler system to burst and flooded their office area.
The water eventually came into our unit and carpet plus some inventory got wet.

They originally wanted to fix their office area and take care of our damages via contractor, but once property management told them the extensive repairs they'd have to do (all walls need to be torn/replaced and flooring plus other stuff).
Now they are going to claim against their own property insurance. This forces us to have to claim our insurance to fix what is needed on our side.

I called insurance and they said, even though this is not our fault. We will have to bear with the deductible and the future premium increase being the unlucky one.
Do we have to take next door tenant to small claims court for these extra burden we have to take upon ourselves?

It seems very easy for insurance companies to wipe their hands clean instead of doing what seems more logical to retrieve the deductible/repair cost against the other tenant's insurance company.
2 replies
Newbie
Feb 4, 2019
23 posts
11 upvotes
You should not have to go through your insurance. It seems like your tenant next door is aware of the damages he/she has caused to your property and can notify its liability insurance provider of the circumstances. Any of your repair or replacement costs should, then, be covered by that provider.

In some cases, their liability insurance won't take action unless they see an actual claim against the business, which outlines the extent of the damages and costs involved to repair. In that case, you'll have to file a claim. I'm not sure if a letter will suffice or if you'll need to file a claim via Small Claims. If you do go the small claims route, however, it does not necessarily mean you will have to fight it in court.

In any case, you should take several pictures of the damage as evidence, and maintain a record of any damaged inventory.
[OP]
Deal Addict
User avatar
Mar 20, 2004
3662 posts
613 upvotes
Mississauga
przmCA wrote:
Feb 6th, 2019 4:41 pm
You should not have to go through your insurance. It seems like your tenant next door is aware of the damages he/she has caused to your property and can notify its liability insurance provider of the circumstances. Any of your repair or replacement costs should, then, be covered by that provider.

In some cases, their liability insurance won't take action unless they see an actual claim against the business, which outlines the extent of the damages and costs involved to repair. In that case, you'll have to file a claim. I'm not sure if a letter will suffice or if you'll need to file a claim via Small Claims. If you do go the small claims route, however, it does not necessarily mean you will have to fight it in court.

In any case, you should take several pictures of the damage as evidence, and maintain a record of any damaged inventory.
Thanks for that information.

This is the first time we have to go through insurance like this and this is what I understand from both property management and our insurance.
- tenant insurance should cover everything inside the unit, landlord's insurance cover exterior/structure
- my insurance company told me, the payout and such are all dealt within your own insurance provider

Since the water came into our unit, that became our own problem and that our insurance will have to deal with it so how would the other company cover our damage if each insurance company deals with their own client?
When you mentioned a letter or claim, do we write up the situation with photos and inventory count and sent to their insurance company? I am not sure if they will share their insurance company information(I'd need their full company name and policy number)
Is there a law/rule somewhere like car insurance where you must share your insurance information during these incident?

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