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The Importance of Tenant Legal Liability Insurance for Commercial Rentals

Business owners often rent or lease commercial space to operate their business. Renting such properties exposes business owners to potential liability for accidental or negligent damage to the premises.

What Does Tenant Legal Liability Insurance Cover?

Tenant legal liability insurance protects against losses or damages to leased property. These losses can be caused directly or indirectly by a tenant or their employees. This coverage ensures that even if damage occurs due to unforeseen circumstances, such as accidents, that the tenant will be financially protected. No matter how much effort you put in to keeping your leased space safe, there is always a chance of an accident happening.

The Difference Between Tenant Legal Liability and Commercial General Liability

Tenant Legal Liability is an extension of a commercial general liability policy. Sometimes the limits can be lower than the overall liability coverage of a commercial general liability policy. A CGL policy typically covers third-party property damage, while tenant legal liability policy covers damage to leased commercial space caused by tenant’s operations or negligence. It is important to always review coverage with your broker due to the potential risk that your business could face. You need to ensure you have adequate coverage to protect yourself financially.

Is Tenant Legal Liability Insurance the Same as Commercial Property Insurance?

Unlike commercial property insurance, which covers owned property and its contents, tenant legal liability insurance addresses the tenant's responsibility for damage to leased premises. It is essential for tenants to understand this distinction, as commercial property insurance does not provide coverage for liabilities related to leased property damage.

Exclusions

Tenant legal liability does not cover personal property of tenants or intentional damage. It also does not cover specialized insurance such as cyber liability professional liability (errors and omissions). Please review with your broker regarding other types of insurance you may require for your business.

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