What Does Tenants Legal Liability Coverage Mean?
Tenant's legal liability coverage is insurance for loss or damage of a property resulting from an action of a person renting space at that property.
This insurance, when purchased by the tenant, pays for the cost of the loss or damage caused by the tenant. This is different from a tenant's content insurance content policy which covers your own possessions within your unit.
Tenants must be told that just because the landlord has liability insurance, it may not be enough to protect the tenant against claims by the landlord's insurer for claims made. Often additional tenant liability can provide appropriate coverage to protect against the landlord's insurer.
People who rent space (residents of commercial apartments or businesses occupying buildings) may cause an accident resulting in property damage, such as a fire. The property owners might hold the tenant liable for the damage caused by accident and bring legal claims against them. However, if the tenant has the tenant's legal liability coverage, he or she will be protected from those claims. This policy works even if the tenant is not directly responsible for the accident (e.g. an employee of the rented office unwittingly causing a fire).
The tenant's legal liability may be written to only cover losses caused by the tenant and caused by the perils of fire, smoke, explosion (limited) and leakage from fire protection equipment. As an alternative, coverage can also be obtained on all risks but subject to a deductible.
Insuranceopedia Explains Tenants Legal Liability Coverage
Often you will find coverage included in commercial general liability policies for Tenants Legal Liability. As an alternative, you can also purchase tenant legal liability coverage as a separate policy.
This coverage is to protect the landlord (or building owner) should you or one of your employees cause damage to the premises you are renting. For example, if you rent a storefront commercial location for your new business, your landlord will likely request you to have some form of Tenants legal liability coverage.
This would provide coverage if you or an employee of yours causes damage to the property you are renting. In this case, you may be legally responsible for these damages. This liability coverage would trigger and a claim would be payable to your property owner or landlord and would not have to come out of your own pocket.
There is also coverage for incidents of bodily injury. If a customer comes in and trips over the boxes you are unpacking in the store and your business is found legally liable for their injury. This policy will provide coverage to a third party while they are on your property.
On the other hand, if the damage is intentional, a result of a wrongful act or if the claim is for your physical assets (computers, office furniture) then these would not be covered by your Tenants legal liability policy but may be considered covered contents on a Commercial Property Insurance policy.