If you’re a lessee, you may be wondering what lessor risk insurance is and if you need it. Lessor risk insurance is a type of insurance that protects the lessee from damage that occurs to the leased property. It’s important to note that this insurance does not cover the personal belongings of the lessee; it only covers the physical property itself.
There are two types: all-risk and named peril. All-risk insurance covers any damage that occurs to the property, except for damages specifically excluded in the policy. Named-peril insurance, on the other hand, only covers damages specifically named in the policy.
Which type of insurance is right for you? That depends on a number of factors, including the value of the leased property, the length of the lease, and your personal risk tolerance. It’s important to work with an experienced insurance agent to determine which type of coverage is best for your needs.
All-Risk Insurance
All-risk insurance is a type of lessor risk insurance that covers any damage to the leased property, except for damages specifically excluded in the policy. Exclusions typically include wear and tear, mysterious disappearances, and damage caused by animals. All-risk policies can be further divided into two subcategories: special and broad form.
Special form all-risk policies are the most comprehensive type of all-risk coverage. They protect against all risks except those that are specifically excluded in the policy. Broad form all-risk policies are not as comprehensive as special form policies, but they still offer a high level of protection. Broad form all-risk policies typically exclude certain types of risks, such as flood damage or damage caused by insects.
Named-Peril Insurance
Named-peril insurance is a type of lessor risk insurance that only covers damages specifically named in the policy. Policies typically cover four types of risks: fire, windstorm, theft, and vandalism. Some policies also cover water damage, but this coverage is typically excluded unless it is specifically included in the policy.
The Benefits of Lessor Risk Insurance
Lessor risk insurance can be an important part of your business’s overall risk management strategy. Here are three benefits of lessor risk insurance that you should know about.
1. Lessor Risk Insurance Can Help You Avoid Financial Ruin
If a customer is injured on your property or if your property is damaged, the costs of repairs or medical bills can quickly add up. If you don’t have insurance to cover these expenses, you could be facing financial ruin. It can help you avoid this by providing you with the financial resources you need to cover these costs.
2. Lessor Risk Insurance Can Help You Keep Your Business Open
If your business is forced to close due to property damage or personal injury, it can be difficult to reopen. It can help you cover the costs of repairs or temporary relocation so that you can keep your business open and continue serving your customers.Â
3. Lessor Risk Insurance Can Help You Attract and Retain Customers
Customers want to do business with companies that they feel are safe and trustworthy. Having insurance can help give your customers peace of mind and show them that you are serious about safety. This can help you attract new customers and retain existing ones.Â
Who Needs Lessor Risk Insurance
You may have seen the commercials or received the mailers, but what exactly is lessor risk insurance? And do you need it? In short, insurance is designed to protect property owners if their tenant causes damage to the property. It’s important to remember that your standard homeowner’s insurance policy will not cover any damage caused by a tenant.
What Does Lessor Risk Insurance Cover?
Lessor risk insurance policies typically cover two main types of risks: property damage and third-party liability. Property damage coverage can help repair or replace any damage caused by a tenant, whether it’s water damage from a broken pipe or fire damage from a cooking accident. Third-party liability coverage can help if a tenant accidentally injures someone on your property, such as if they slip and fall on a wet floor.
How Much Does Lessor Risk Insurance Cost?
The cost of lessor risk insurance will vary depending on a number of factors, including the value of your property and the amount of coverage you need. However, you can expect to pay anywhere from a few hundred dollars to a few thousand dollars per year for a typical policy.
Is Lessor Risk Insurance Required?
In most cases, no. There is no law that requires property owners to carry insurance. However, if you have a mortgage on your property, your lender may require you to have this type of coverage in place before they will approve your loan. Additionally, some landlords choose to require their tenants to carry this type of insurance as part of their lease agreement.
Finally
Lessor risk insurance is a type of insurance that protects lessees from damage that occurs to leased property. There are two types of lessor risk insurance: all-risk and named peril. All-risk insurance covers any damage to the property except for damages specifically excluded in the policy; named-peril insurance only covers damages specifically named in the policy.
The type of coverage you need depends on a number of factors, including the value of the leased property and your personal risk tolerance. It’s important to work with an experienced insurance agent to determine which type of coverage is best for your needs.
If you want to discuss options for lessor risk insurance, please call us at 561-732-9305 our quoting hours are Monday through Friday from 8:30 AM to 5:00 PM. In addition, you can request a quote online. Please remember, We Handle All the Work, While You Save!
Robert Macoviak is the President of Oyer, Macoviak and Associates. Oyer, Macoviak and Associates is the oldest independent insurance agency in Boynton Beach and has been in business since 1953. Oyer, Macoviak and Associates are vested members of the community who are committed to doing business face-to-face and being your insurance advocate in times of need.
