Lessor's risk insurance is essential for any commercial property owner who rents out space in their property to other businesses. While you may require your tenants to maintain their own insurance policies as a condition of their leases, it is still a good idea to maintain your own coverage for additional protection. Here's what you need to know.
What is Lessor's Risk Insurance?
Lessor's risk protects you in case any of your tenants suffer losses due to emergencies. For example, fire and storm damage could result in them losing inventory or the ability to operate their shop temporarily. Your coverage would help pay for the damages and get the building back into working order.
This coverage can also protect against any injuries that occur on the commercial property you own, including injuries to your tenants, their employees, customers and suppliers. The coverage can help to pay for their medical costs and other associated expenses.
Have questions about lessors’ risk? Contact our team to get started!
In order to qualify for lessor's risk insurance, you typically must rent out at least 75 percent of your commercial building in Colorado, though you may maintain the remainder for your own use. The specific usage requirements can vary by jurisdiction, though, so be sure to verify the specific laws in your area, as this is just a general guideline. In most cases, a single lessor's risk insurance will only cover a single building, so you'll need multiple policies if you own more than one commercial property in Colorado.
Choosing the Limits for Your Lessors Risk Coverage
In choosing the limits for your insurance policy, it is always a good idea to purchase the highest amount of coverage you can reasonably afford so that you are as protected as possible. Coverage of at least $1 million is fairly standard, though you may wish to increase your limits if any of your tenants engage in high-risk businesses, like manufacturing.
Speak with a Lessor's Risk Specialist Today
If you are unsure how much coverage you need, Contact Us! We are experts in the insurance industry, and we’ll work with you to understand how you and your tenants use your commercial facility to make the appropriate recommendations. Call 719-329-4441 today to learn more and get the process started.
We are located in Colorado Springs, but serve Denver, Pueblo, Boulder, and all of Colorado!