Lessor’s Risk (Landlord Policy) 101

​Today, we will break down a lessor’s risk policy; what it is, the coverage it provides, and the circumstances that can affect your rating.

Let’s talk about a few components of a lessor’s risk policy. One, obviously, is property coverage. Your property coverage protects your building and the office spaces that you lease to others. 

Secondly, you have liability coverage, and your liability coverage is what is going to protect you if someone is hurt on your property. For example, they slip and fall, step in a pothole, or anything of that nature that would allow them to come back and sue you for the damages. 

Number three, we have the loss of income coverage. Loss of income coverage is extremely important, and a lot of times, it is missed or left out on a lessor’s risk policy. What that loss of income coverage does is if you have a claim, say the building burned down and has to be rebuilt, the loss of income coverage will provide the rents payable to you and your business while your property is being repaired or replaced to a condition in which your tenants can move back in. Doesn’t that sound like an extremely important coverage option to you? I indeed think so. And it’s one that a lot of agents will leave off simply because they want to have a lower quote than the incumbent agent that manages the current policy. 

Next, you have legal expense coverage. Legal expense is what it sounds like. It protects you and provides coverage for your legal defense if someone sue’s you. This can be either a visitor on your property or a tenant. Whether on the personal liability side or they become injured on your property. Or if they sue you for other actions you committed outside of an injury. Those do happen. 

A great optional coverage and another huge protection opportunity that you have is Equipment Breakdown. Equipment Breakdown can cover your air conditioning, appliances, and other items that you have in that building that you provide for your tenants if they are damaged by a covered loss. Absolute great coverage to have, but again, another reasonably low-cost option that agents will not talk about because they are trying to blow you away with a low price rather than provide coverage that could save you a ton more money if you have a situation in which it would’ve been helpful to have. 

So that’s lessors risk broken down in a quick and easy way to understand. If you have any questions feel free to reach out to us here at PrimeRisk Insurance Solutions at 480-613-8387.

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