So just what is this type of insurance all about? Basically, when a landlord rents their property out to a tenant, they will then bear the risk that someone be injured while visiting the tenants. If you are renting and your friend comes over, trips on the step in the way in, and breaks their nose, then this could be an issue for your property owner. Now the property owner might be liable for the damages!
This of course is bad news for landlords, as it means they could now find themselves paying out for all kinds of injuries involving people that they have no dealings with! They know nothing about these people and they know nothing about how they are acting in their apartments. So if they want to protect themselves, then they might require in their lease that the tenant purchase general liability insurance including them as an additional insured. Now the tenant will be safe from being sued by their own guests and they are likewise protecting their landlords from the same fate.
Covering your landlord as an additional insured. When considering whether or not to sign a commercial lease, you should always look for these terms. Often, landlords will ask that you purchase general liability, often with a specific limit. They will then ask that they be covered as an additional insured and that might also specific particular coverages that need to be included in the policy. If you find this a little confusing, then speak with your agent or your broker and they will often be able to help you determine which coverages are in the policy.
Some leases will have conditions that are very difficult to meet. For instance, you might find that you are required to notify a landlord within 30 days of when you intend to cancel the policy. You might find that insurers are willing to send cancellation notices to the additional insureds – but that won’t always be the case. Likewise, they may require other conditions that are unreasonable, or that increase the cost of your staying there considerably. If you’re unhappy with the terms after looking into them, consider discussing with your landlord. You might find that they are willing to compromise and come to an agreement that is satisfactory for everyone.
Commercial leases area not written by insurance professionals but rather by lawyers – keep this in mind as it means that the demands might not be easily met and the terminology may be inaccurate or inappropriate. It’s not uncommon to find contracts using the term personal injury when they in fact mean physical injury to someone’s body. This should actually be bodily injury. Leases will often also contain defunct or outdated terms. Also see commercial tenant insurance requirements.
If you decide to go ahead and cover your landlord under the liability policy, then you will probably need an endorsement. These are used to cover landlords as additional insured and their precise nature can vary from one company to another. Keep in mind that many will limit coverage to only the landlord in the endorsement – so if you have multiple landlords (a husband and wife for instance), then they will need separate endorsements.
Endorsements will also typically include schedules. These will identify the building or part of the building that you have leased and it’s very important to check that the premises are correctly described here. If the building is incorrectly identified, then the claim against the landlord might not be covered leading to lots of headaches for everyone. The endorsements should also include all details such as the landlords’ names and this information needs to be accurate.
Some policies will automatically provide coverage for lessors of premises that are leased to you. They might also covered by the ‘who is an insured’ section of your policy, so always double check and you might find that you already have the coverage that you need. Keep in mind as well that if you have multiple properties that you are lending all from the same landlord, you will still only need one policy for each landlord.
Covering your landlord as an additional insured. As with most other types of policy, additional insured endorsements will be limited. The standard ISO limits coverage to only those people or groups specifically listed in the endorsement as mentioned. The landlord will also only be covered for their ownership, maintenance, or use of the premises as described in that endorsement.v
That means that if your landlord should arrive unannounced at your property, pour a slippery substance on the floor, and then leave – that would still find the landlord liable should someone trip. Likewise, if the building is not properly maintained, then the landlord will likely be in breach of contract with their tenant (normally you will sign an agreement where the landlord promises to uphold the building). For instance, if they fail to fix something in a timely manner and this leads to a gas leak, which injures a visitor, then the landlord will still be liable.
These policies also usually exclude accidents that occur after you cease to be a tenant. So if your contract is up and you return to the premises with a friend who is injured, this would still be the fault of the landlord. Likewise, they will often exclude injury caused by construction etc. This might instead require a builder’s risk insurance policy.
Covering your landlord as an additional insured. Finally, keep in mind that most policies will not provide any broader coverage that that specifically stated in the contract. So if the contract requires less coverage than the policy is capable of providing, it will still default to that lesser amount.
