Lessor Risk Insurance
If you own a commercial building and lease out most of it (typically 75% or greater) to tenants for retail, office, personal, or warehouse space, a lessor risk insurance policy is highly recommended.
What is Lessor Risk Insurance?
Lessor Risk Insurance protects you from liability if a tenant injures themselves, or causes property damage while on your facility’s property. This comes in handy if you’re sued by a tenant or one of their customers.
What does Lessor Risk Insurance cover?
A Lessor Risk Insurance policy can protect you from being financially responsible for any of your tenants’ property loss (including theft and vandalism) while their property is stored on the premises. This coverage will also protect you from a lawsuit that arises from personal injury of an employee, the lessor themselves, or any of their customers while on the property.
How much do I need?
While most businesses won’t need more than $1 million in coverage, all businesses should speak to a qualified insurance agent to determine how much coverage should be purchased. Limits can exceed $5 million.
If you own multiple properties, even ones that are adjacent to one another, you will likely need several insurance policies to cover each building. Talk to an agent at Heaton Bennett Insurance to determine the amount of coverage you need and how many policies you should carry.
Frequently Asked Questions
Who should consider lessor’s risk insurance?
Lessor’s risk insurance may be appropriate for owners of commercial buildings that are leased to other businesses. Insurance needs depend on the property, tenants, lease agreements, ownership structure, and services provided by the landlord.
Can lessor’s risk insurance cover the building?
Commercial property coverage may be available for an eligible leased building and certain landlord-owned property. Limits should reflect the property’s characteristics and estimated rebuilding cost.
Does lessor’s risk insurance cover tenant property?
A landlord’s policy generally is not intended to insure a tenant’s inventory, equipment, furniture, or improvements. Lease agreements should clearly describe each party’s insurance responsibilities.
Can the policy address injuries in common areas?
Liability coverage may respond to certain covered claims involving injuries in landlord-controlled areas such as parking lots, walkways, or shared entrances. Coverage depends on the circumstances and policy terms.
How do tenant operations affect lessor’s risk insurance?
Tenant activities can influence eligibility, pricing, and coverage. Texas property owners should tell their agent about every occupant and report significant changes in tenancy or building use.