Lessor Risk liability vs tenant liability

[trotter]

When seeking for a lessor risk policy for our customers most applications ask for tenant to carry liability. Insured says yes tenant carries liability and policy is written and live goes on. 2 years later tenant drops liability and has no coverage. How far will the lessor risk liability go to protect owner of building. I guess it depends on what type of situation has taken place but for example a person trips and falls on tenants premises, will lessor liability pay damages and protect owner of building up to limits on lessor policy?

Thanks

Trotter

[martylebson]

Landlord should keep records and require up-date evidence each year. Thta is normal practice for professional landlords.

[darnovak]

Do your carriers require tenant liability for 'lessor's risk' policies? if so, this would be set forth in the underwriting guidelines and/or the insurance contract itself. By the insured not having the required underlying (tenant's) insurance in place it may be considered a material misrepresentation on the part of the insured. It may also be failure of the insured to comply with a warranty. Carriers have been known to void or decline coverage in these instances; or declare the policy void ab initio (from inception). I suggest you may want to familiarize yourself with the underwriting and eligibility guidelines for these 'lessors risk' contracts. At the very least, I suggest you obtain specimen copies of the policies, forms, and endorsements used, read them, analyze them, and know what they cover and what they exclude. Pay close attention to the policy conditions - especially those applicable to loss situations. Sorry, but these suggestions are material covered in Insurance 101. regards,

[Rock54]

The reason for the tenant liability is so the owner does not have to use their insurance. There are adverse consequences when the owner's liability insurance responds to lawsuits arising out of the tenant's premise.

The owner may be embroiled in a lengthly lawsuit because the owner's carrier is disputing coverage alleging that the tenant was negligent and not the owner.

The owner's carrier may non renew due to the cost of the legal defense and/or claim payment. The prospective carriers will want to review the loss history and if it is revealed that the owner's claim(s) would have been paid by the tenant's insurance it is highly likely a majority of them will decline to offer coverage. In instances where a majority of carriers decline the risk the few remaining carriers that offer coverage will be at a significantly higher premium and perhaps, reduced or restricted coverage.

[LadyBroker]

Also, keep in mind that in the event the Tenant does not have any coverage, even though the Landlord does, the Landlord policy is for the Premises only. It is not going to pick up, not is it likely to defend, a claim arising from the tenant's Business Operation.

It is a subjectivity in most nearly all Landlord policies that the tenant has their own coverage for their business operations.

[robmejia]

Lessor's risk insurance protects you from liability when the lessee faces property loss including damage and destruction of property as for tenant liability insurance, it protects you from other costs for which you are liable as a tenant. There are various situations covered by this

[LadyBroker]

We were speaking only to the LIabilty of the landlord and the tenant, not to Property coverage.