CLAIMS
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Tip: If you are posting a market request, include the state abbreviation in your post title to get better responses.
Tip: If you are posting a market request, include the state abbreviation in your post title to get better responses.
Typically, the risk is where the owner of a property does not occupy it but instead leases it to another (i.e., to a tenant). Even though the owner isn't at the property, there may be some control or vicarious liability that exposes the owner to risk of loss through liability to third parties.
The most common example of such loss is when there's a trip/fall. The injured party typically sues the tenant and the owner, looking to maximize the potential payoff by seeking recovery from both, claiming both had a separate, independent duty to maintain the property in a safe condition.
Another example is where someone is the victim of a crime, on or near the subject property. The injured party typically sues both tenant and owner, claiming both had a duty to provide adequate security, lighting, etc.
Although most landlords/owners require tenants to have GL/premises coverage that extends to the landlord/owner as an Additional Insured, the Lessor's Risk policy provides a backup for the landlord/owner, in case the tenant's policy rejects coverage or lapses or has insufficient limits, etc. The Lessor's Risk policy is particularly important for those occasions when a court/jury may find the owner to be independently negligent, independent from the tenant's negligence; because the Additional Insured status usually doesn't extend the tenant's policy to the independent negligence of the landlord/owner.
Lessor's Risk coverage is usually much less expensive than GL/premises coverage for the tenant/occupant. No property owner should be without it (i.e., unless they're so rich that they can afford to self-insure a very big loss).
Good luck with that sale.
The most common example of such loss is when there's a trip/fall. The injured party typically sues the tenant and the owner, looking to maximize the potential payoff by seeking recovery from both, claiming both had a separate, independent duty to maintain the property in a safe condition.
Another example is where someone is the victim of a crime, on or near the subject property. The injured party typically sues both tenant and owner, claiming both had a duty to provide adequate security, lighting, etc.
Although most landlords/owners require tenants to have GL/premises coverage that extends to the landlord/owner as an Additional Insured, the Lessor's Risk policy provides a backup for the landlord/owner, in case the tenant's policy rejects coverage or lapses or has insufficient limits, etc. The Lessor's Risk policy is particularly important for those occasions when a court/jury may find the owner to be independently negligent, independent from the tenant's negligence; because the Additional Insured status usually doesn't extend the tenant's policy to the independent negligence of the landlord/owner.
Lessor's Risk coverage is usually much less expensive than GL/premises coverage for the tenant/occupant. No property owner should be without it (i.e., unless they're so rich that they can afford to self-insure a very big loss).
Good luck with that sale.
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AlstonCPCU
- Insurance Journal Addict
- Posts: 37
- Joined: Tue Jul 25, 2006 10:40 am
The tenant could cause a fire thereby destroying their own space and damaging other tenants' spaces. Damage to Premises Rented or Leased to You ("Fire Legal") of at least $300,000 would be good for the Lessor to require the tenant to have in the lease. That's a potential property claim scenario if the tenant does not have the coverage.
There could be a car accident in the parking lot involving a pedestrian. The owner could be sued along with the driver by the pedestrian for alleged failure to provide necessary traffic controls, safe parking area, etc. There's a liability exposure.
A pedestrian could slip and fall on a sidewalk. The pedestrian could sue the Lessor for not providing reasonable care for the common areas.
There could be a tenant that is a dry cleaner. The dry cleaner pollutes the premises with chemicals that cause damage to other tenants spaces or cause bodily injury/sickness. The owner is sued for failing to mitigate and stop the tenant from continuing to pollute the premises, etc. You name it.
The key here is litigation. The reason for Lessors Risk liability coverage is all about defense coverage. A Lessor needs defense coverage for a myriad of reasons including many that are unforeseen. Lawyers are creative. Emphasize that to the insured.
There could be a car accident in the parking lot involving a pedestrian. The owner could be sued along with the driver by the pedestrian for alleged failure to provide necessary traffic controls, safe parking area, etc. There's a liability exposure.
A pedestrian could slip and fall on a sidewalk. The pedestrian could sue the Lessor for not providing reasonable care for the common areas.
There could be a tenant that is a dry cleaner. The dry cleaner pollutes the premises with chemicals that cause damage to other tenants spaces or cause bodily injury/sickness. The owner is sued for failing to mitigate and stop the tenant from continuing to pollute the premises, etc. You name it.
The key here is litigation. The reason for Lessors Risk liability coverage is all about defense coverage. A Lessor needs defense coverage for a myriad of reasons including many that are unforeseen. Lawyers are creative. Emphasize that to the insured.
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shannonwells830
- Insurance Journal Fan
- Posts: 3
- Joined: Wed Oct 31, 2012 1:29 am
Re: CLAIMS
It is all under public liabilities. Well the lessor is responsible for any slips and trips of a pedestrian in his lease. He also has a duty of care for his lease and should be able to provide a safe place for anyone.