By: Terry Koplan, Vice President
To properly protect an insured it is important for the insured to have their own insurance protection in place and not depend on a tenant’s program and the lease agreement to properly provide insurance protection. It is “standard” practice in the insurance industry to provide a liability only policy to protect the landlord when the tenant is responsible for “all” coverage. Some of the reasons are as follows:
- The tenant’s insurance program is designed to protect and defend them and not necessarily the landlord.
- Being named as an additional insured on the tenant’s policy is important but the landlord is not a “named insured” and your legal status is not the same.
- A claim can be made against the owner of the property and not the tenant. If the tenant is not named in the lawsuit, the lawsuit will not be defended by your tenant.
- If the tenant’s insurance limits are exhausted, you may find yourself with no defense.
- If you, the landlord, have your own policy, your insurer will work on your behalf to protect you and if appropriate push the claim to the tenant’s insurance program.
- A landlord having his/her own policy provides defense and the policy limits and can be added to an umbrella policy, if one is in place, for additional limits.
- A liability loss that is considered an issue of the building owner and having nothing to do with the operations of the tenant is usually denied by the tenant’s insurance and becomes the landlord’s claim.
To learn more about the lessor risk liability insurance you need to protect yourself and your property, contact Hoffman Brown Company. Serving Sherman Oaks and the surrounding California cities, our dedicated team is ready to ensure you are not left exposed. Call us today!