Owning a commercial building that you lease to others can be a great investment, but it’s not without risk. That’s why making sure you have the right insurance coverage to protect both your physical property and your liability in case of a lawsuit is crucial. This week, let’s talk about lessors risk insurance, also sometimes called landlord’s insurance.
What is lessors risk insurance?
Lessors risk is a type of small business insurance which protects you if you own a building that you lease or rent out as commercial space, such as retail, warehouse, or office space. It provides property damage coverage as well as liability coverage in case one of your tenants sues you because of a covered event that took place in your building or on your property. Of course, your tenant(s) should also carry their own general liability and commercial property insurance, but lessors risk is an important protection for you as a landlord.
Covered risks may include injury due to slip and fall, weather damage, fire, water damage (from a burst pipe or sewer back up), theft, vandalism, and auto accidents on the property.
To be eligible for lessors risk insurance, you as the landlord may not occupy more than 25 percent of the building. Generally, the building must be completely or mostly occupied, have no electrical hazards, have working smoke detectors, sprinklers and fire extinguishers, and be properly maintained.
You will be able to choose the coverage limits you want to carry. Many landlords find one million dollars worth of liability coverage to be enough, though each situation is different. However, if you have multiple tenants or tenants who engage in hazardous business, like manufacturing, for example, you may need higher limits.
Look to Lakewood Financial for all your insurance needs
Whether you need business insurance (like lessors risk) or personal insurance, the experts at Lakewood Financial are here for you. We’ve been helping customers find coverage tailored to their needs since 2003. If you’d like an insurance quote, please call us at 941-747-4600, or contact us online. Lakewood Financial is a full service, independent insurance agency, primarily serving the communities of Sarasota, Bradenton, Lakewood Ranch, and surrounding areas. We hope you’ll allow us to be your partner in business, and in life.