Lessor Risk Insurance in California
Lessor Risk Insurance can help address risks faced by owners of commercial buildings leased to tenants. Depending on the situation, important exposures may include building damage, premises liability, tenant occupancy, common areas, loss of rents, and building systems.
Insurance options can vary considerably between companies. AIM First Insurance Servicescan help clients in California compare available policies and review important differences in coverage, limits, deductibles, eligibility, and exclusions.
Why Is Lessor Risk Insurance Important?
Lessor’s risk insurance is commonly used for owners of commercial buildings that are leased to other businesses. The landlord’s policy generally focuses on the building and ownership exposures, while tenants insure their own operations, contents, and business liabilities.
The goal is not simply to purchase a policy with the lowest premium. It is to understand the exposures involved and select insurance that fits the individual, property, vehicle, or business as closely as possible.
Lessor Risk Insurance Coverage Options
The appropriate coverage depends on the specific situation. Options may include some of the following protections.
Commercial Property Insurance
Property insurance may help protect the landlord’s building and other insured property against covered losses.
General Liability Insurance
Liability coverage may help with certain covered claims involving common areas, premises ownership, or other landlord exposures.
Loss of Rental Income
Rental income coverage may help replace eligible rents when a covered property loss prevents tenants from occupying the building.
Equipment Breakdown Coverage
Coverage may help with certain sudden failures involving landlord-owned HVAC, electrical, boiler, or other mechanical systems.
Umbrella Liability Insurance
Umbrella coverage may provide additional liability limits above qualifying underlying policies.
Lessor Risk Insurance FAQs
What is lessor’s risk insurance?
Lessor’s risk coverage is designed for owners of commercial buildings that are primarily leased to tenants rather than occupied by the building owner.
Does lessor’s risk insurance cover the tenant’s business property?
Generally no. Tenants normally insure their own inventory, equipment, improvements, liability, and business income under separate policies.
Can lessor’s risk insurance cover lost rental income after property damage?
Business income or rental-value coverage may help replace certain lost rents when a covered property loss makes leased space unusable.
What happens if a commercial building has multiple types of tenants?
Tenant mix is an important underwriting factor. Restaurants, manufacturers, offices, retail stores, and other occupancies can create very different property and liability exposures.
