What is Lessors Risk General Liability?
Lessors Risk General Liability insurance, also known as Lessor’s Risk Only (LRO) insurance, is designed for property owners who lease or rent out their buildings to tenants. This type of policy provides liability coverage in case someone is injured on the property or there is property damage related to the leased premises. It helps protect landlords from lawsuits and costly claims filed by third parties.
Additionally, having robust liability coverage is essential for landlords to handle potential job site risks, such as accidents that may occur during tenant operations.
Who Needs It
Any individual or business that owns a building and leases it to others should consider Lessors Risk insurance. This includes landlords of retail spaces, office buildings, apartment complexes, warehouses, and industrial properties. Even if you lease to a single tenant, this coverage can be crucial for protecting your investment and meeting lease or lender requirements.
What It Typically Covers
Lessors Risk General Liability policies usually include:
- Third-party bodily injury – Covers medical costs and legal fees if someone is injured on the premises.
- Property damage – Protects against damage caused to someone else's property due to conditions at your leased building.
- Legal defense costs – Pays for legal representation in covered liability claims.
- Tenant liability – Offers some protection if a tenant’s actions cause damage and you are held responsible.
Common Exclusions and Limitations
While this coverage is broad, it doesn’t cover everything. Common exclusions include:
- Damage to your own property or building (separate property insurance required)
- Employee injuries (covered under workers’ compensation)
- Intentional acts or criminal behavior
- Professional liability or errors and omissions
Always review your policy to understand exactly what is and isn't covered.
Factors That Influence Cost
The cost of Lessors Risk insurance depends on several factors, such as:
- Type and size of the building
- Number of tenants and their business types
- Building location and condition
- Claims history
- Security and safety measures in place
Proof of Insurance & Compliance
Many cities, lenders, and lease agreements require proof of general liability insurance. A certificate of insurance (COI) can verify your coverage. Requirements may vary by state and by the terms of your lease agreements, so it's important to make sure your policy meets all applicable conditions.
How to Get a Quote
Getting a quote for Lessors Risk General Liability is easy. You’ll typically need to provide details about your property, tenants, and current coverage. Get a quote now to find coverage that fits your needs.
Frequently Asked Questions
What is the difference between Lessors Risk and property insurance?
Lessors Risk covers liability for injuries or damages involving third parties, while property insurance protects the building itself from damages like fire or vandalism.
Do I need Lessors Risk if I only lease to one tenant?
Yes, even a single tenant can pose liability risks. This coverage helps protect you from lawsuits and accidents involving third parties.
Is Lessors Risk insurance required by law?
It's not always legally required, but many lenders and lease agreements will mandate it as part of compliance and risk management.
Can I add my tenant as an additional insured?
In most cases, tenants are not added to your Lessors Risk policy. They should carry their own liability coverage and may name you as an additional insured on their policy instead.
Does this coverage include natural disaster protection?
No, damages from natural disasters like floods or earthquakes are typically excluded and require separate policies.
Still have questions? Talk to a local insurance expert.