This is straight from IRMI.com:
Damage to Premises Rented to You Limit
Coverage for Damage to Premises Rented to You is not provided by a specific coverage grant but rather by exceptions to certain exclusions found in Coverage A""bodily injury and property damage. The first exception provides coverage for property damage to premises, including the contents of the premises, rented to the named insured for 7 or fewer consecutive days if an insured is legally obligated to pay for such damage due to any cause except fire.
The second exception, formerly known as fire damage legal liability, provides coverage for damage only to the premises (not the contents of the premises) if an insured is legally obligated to pay for the property damage, but only if the damage is caused by fire. Any legal liability imposed on an insured must arise out of tort and not contract for either exception (and thus the coverage) to apply. In other words, if an insured is held liable solely due to an agreement to be responsible for the property or for damage to the property, there is no coverage.
The coverage granted by the exceptions noted above is subject to the Damage to Premises Rented to You limit listed on the declarations. The limit applies to any one premises and is a sublimit of the each occurrence limit. Therefore, any property damage paid under the Damage to Premises Rented to You limit will reduce the each occurrence limit for that same occurrence and will also reduce the general aggregate limit.
Please encourage your client to purchase a commercial property/liability policy, and have their attorney draft a solid legal lease agreement with specific insurance requirements that the business entity must furnish the individual building owners.
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