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Commercial InsurancePlenty of commercial landlords never intended to get into the business; it just fell into their lap. They just happened to own a piece of real estate that made for a perfect office building. Or they found that their store was making them more money as a rental property than it was as a frame shop. Whatever the case may be — whether you intentionally invested in a commercial space or it just happened into your plans — if you're renting out your first commercial property, you have a lot of new insurance concerns to manage.

Here's what you need to know about general liability insurance for commercial landlords:

  • Your tenants are not legally required to carry general liability insurance. Neither are you for that matter. This introduces a clear problem. If you're not covered, and your tenant isn't covered, then you're both going to be in a lot of trouble if someone sues.
  • While your tenant is not legally required to carry insurance, you can put a provision in the rental agreement that they need to carry general liability insurance in order to rent your property. You may also want to require business interruption insurance, which will allow your tenant to keep paying rent through their insurance — even if their business needs to go on hiatus following an incident.
  • Once you've signed a tenant, you will want to provide your insurance agent with all the relevant information. While your tenant's liability policy will be the first line of defense against claims, you will nevertheless be inviting certain risks onto your property by nature of who you're renting out to. Your insurance agent needs to know this information.
  • If a tenant will invite more liability concerns than you are prepared to handle, you are free to refuse to rent to certain businesses. Not every parking lot can serve as a rest-stop for 18-wheelers. If you don’t want to refuse to rent to certain businesses, you can insist that tenants carry certain insurance policies to help buffer you against claims.
If you're new to renting out commercial space to businesses, your best course of action is simple: Ask your agent. Anything that can be done to better manage the risk involved in renting space to businesses, your agent is there to help you with. Just like you, their first interest is in reducing risk.
Posted 7:33 AM

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