Whether you are using your own funds or a loan to finance a rehabilitation project for your historic commercial building, you will need some specialized insurance. This special insurance will protect you from loss or liability during the construction process. The insurance you'll need depends on whether your building will be occupied or not during the rehabilitation.

Find a Good Insurance Agent

Since the insurance industry changes quickly, the best way to make certain you have the right insurance during your rehabilitation project is to check with an insurance agent. Be sure you know exactly what your lender requires for insurance products as well.

Assess Your Insurance Needs

If you are a property developer who will be managing other primary contractors or subcontractors during a rehabilitation project, you will need to insure your property and the materials used during construction. If you are performing construction work, you will also need to insure the tools and equipment you use on the site.

If you or any tenants will be living or working in your building during construction, you should check with both your insurance agent and your lender. In addition to the normal insurance products placed on an occupied structure, you may also need to consider adding these two other types of insurance:

• Builder's risk insurance. Builder's risk insurance protects your building and the materials used during construction.
• Inland marine insurance. Inland marine insurance protects your tools and equipment.

Sometimes you can add riders to your current property insurance for less money than it would cost to add new policies.