Lessors Risk Insurance San Diego

Financial Assistance for Landlords Who Lease Their Properties to Commercial Tenants

Herriott & Mijailovic is an independent insurance agency which offers Lessors risk insurance for landlords who rent out their commercial property to tenants in San Diego. Also known as LRO, this coverage is vital for managing a profitable business, as it protects you from potential tenants’ lawsuits by limiting your out-of-pocket money. Because of this, anyone who rents out an apartment building, retail mall, office space, shopping centers, warehouse, or similar real estate, should obtain Lessors risk only coverage.

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At H&M, we can supply you with a wide range of products, including Lessors risk, General liability, Commercial property, Workers compensation and many more to protect your business.

We will customize an insurance package based on your unique needs and ensure maximum protection. Contact us today and get insured by major national suppliers like The Hartford, First American, Nationwide, and others. Call (619) 296-0005.

Why H&M Insurance Agency Is Your Best Choice

When you are searching for the insurance agency, you should consider how effective the agents are in protecting you against hazards that could jeopardize your business. Partnering with seasoned agents from Herriott & Mijailovic who have necessary skills and deep understanding of insurance market means being able to rest assured knowing you, your employees, and your assets are secure. With H&M on your side you can expect affordable premium rates, maximum protection, prompt customer support and speedy claim resolution. We pride ourselves on being recognized as a trustworthy insurance provider in the San Diego area. This will allow you to focus on what matters most to you. Because our clients are happy with our service, they renew their policy each year.

  • Instant, no-obligation quotes
  • Budget-friendly rates
  • Trusted and reliable independent agency
  • Policies customized for your needs
  • Easy and efficient claim processing
  • San Diego market specialists

What Is Lessor’s Risk Insurance?

Also known as Lessors risk only, or Landlord’s insurance, or LRO, this is a type of financial assistance which is designed to shield commercial property owners from liabilities and risks associated with their investment. It protects landlords from lawsuits filed by their tenants or third parties by helping pay for the expenses such as attorney fees, accident-related expenses, legal expenses, and other costs related to the claim, up to policy limits. In case you are sued by tenants for property damage or bodily injuries sustained while on your premises.

Since LRO does not protect your property against damage, it only protects landlords from tenant claims by limiting immediate, out-of-pocket expenses. Because of this, it is often part of larger insurance package and is bundled with general liability and commercial property insurance. To be eligible for this coverage, the percentage of commercial space occupied by the owner must be less than 25 percent.

Although it is not mandatory by law, you may be required to get one by the lenders of your commercial loan.

What’s Included In Lessors Risk Only?

Lessor’s risk insurance serves to help you pay for the legal fees, lawyer costs, judgements and settlements if you’re sued or found liable for property damage or bodily injury of tenants. Typical claims scenarios covered include:

  • Slips, trips and falls
  • Bodily injury
  • Vandalism & theft
  • Weather damage (wind, hail, snow, ice)
  • Water damage
  • Fire and smoke damage
  • Vehicle accidents
  • Data loss

Optionally, your coverage can include various add-ons to address specific risk you are facing. These endorsements may include:

  • tenant relocation
  • cyber liability
  • excess liability
  • pollution liability
  • extended replacement cost
  • ordinance and law

What’s Not Included

Lessor’s risk coverage doesn’t cover damages to your tenant’s business property such as office furniture, computer equipment, inventory, and supplies. It doesn’t cover damage to the building you own either, which is why you will need to consult with insurance professionals to ensure you have adequate coverage for the entire scope of risks.

Commercial property

You are strongly advised to acquire this Commercial property coverage. It offers protection when property is lost, stolen, or damaged by things like fire, theft, and vandalism. It helps pay for the repair or replacement of physical assets including the building itself and everything inside it:

  • Inventory and furnishings (machines, tools, equipment, supplies, fixtures, installations, signage, etc.)
  • Physical building (damage from broken water or sewer pipes, subsidence, natural disasters, theft, etc.)

Perils such as windstorm or explosion are typically included, while earthquake and flood should be added as endorsement.

Tenant’s business property

Advise your commercial tenants to obtain Business renter insurance, as their business property needs to be protected, too. When they have this policy, they will insure their company’s equipment, inventory, and supplies against various hazards that could potentially cease their operations.

How Much Coverage Do I Need?

In order to determine how much coverage you’ll need, you have to assess a variety of different factors, because there is no one-size-fits-all solution. Each company has different insurance needs and different risk levels that determine how much they can potentially lose. So when you meet with insurance agent, you should provide important pieces of information which will help them better understand your circumstances and recommend proper amount of coverage you need. You will discuss things like condition of the building, how many tenants you have, what type of business they run, geographic location, and other relevant aspects.

Who Needs Lessors Risk Only Policy in California

Lessor’s risk insurance is designed for any commercial property owner who rents out the space to tenants. It is especially important for small business owners because without this coverage, they may suffer significant financial loss. In some states you may also be required by law to acquire one, so be sure to check contracts and local and state laws to see whether you must have this coverage.

It is intended for landlords occupying less than 25% of leasable space in a building, so it would not apply to a duplexes or dwellings where the owner occupies half of the property.

Here’s who needs to include LRO coverage in their insurance package:

  • Owners of commercial properties (apartment buildings, warehouses, malls, office buildings, etc.)
  • Small businesses who lease to commercial tenants
  • Owners of mixed-used properties
  • Owners or business entities granted commercial real estate loan

Cost How Much Does LRO Cost in California?

When calculating the cost of Lessor Risk Only coverage, various elements are taken into consideration.

  • Building location – If the building is in an area with higher crime rates, you will most likely pay higher premiums.
  • Construction materials – Materials can also influence the price. For example, if fire-resistant materials are used to construct the building, you can expect to pay less money to insure the property.
  • Occupancy level – Higher occupancy may mean higher insurance costs.
  • Safety features – Safety equipment like smoke detectors, sprinklers, and burglar alarms help lower the rate.

How to lower insurance price?

If the final costs seems to high for you, you may want to try and get discounts. Here’s how to do it:

  • Install fire alarms – If the building has an active fire alarm system with certificate, your rate will be lower.
  • 100% sprinkler coverage – Regularly maintained sprinkler system for fire suppression will also lower the price.
  • Loss free properties – Prioritize profitable business running and ensure you don’t make any losses.
  • Multiple location discount – You can earn a discount if you have multiple locations on the same policy.
  • Regularly pay the premiums – Regular payers enjoy multiple benefits, included discounted rates.
  • Full payment – If you decide to pay the full amount of premium at once, you will be offered a reduced price.
  • Ownership duration  – With certain suppliers, you may qualify for a discount if you have owned the place for more than 2 years.
lessors risk only insurance san diego

LRO Vs. General Liability Insurance: What Is the Difference?

While they both have similarities in terms, they both offer protection from lawsuits, they are also different in terms of what kind of risks are involved. If someone sued you for slip and fall accident, either your Lessors risk or your General liability would cover the damages. It would also be a good idea for your commercial tenants to have general liability insurance.

  • Lessors risk only – Covers claims of injuries and lawsuits caused by risks involving tenant’s use of property.
  • General liability – Covers injuries and lawsuits of public including customers visiting your tenant, vendors, delivery personnel, etc.

Other Policies To Consider

While landlord’s insurance covers major risks in commercial real estate industry, it does not provide complete protection, which is why you should consider including other policies as well.

  • Commercial umbrella insurance – Offers extra coverage over and beyond your standard policy limits once a policy’s limit is reached.
  • Business interruption insurance – Helps compensate lost income due to covered risks. For instance, if the business which leases the space from you is shut down due to storm, you will be compensated for the lost rent.
  • Cyber liability insurance – Covers data breach or software attack costs.
  • Workers’ compensation insurance – If you have employees, you are required by law to have this policy. It protects both you and your employees by supplementing wages and medical bills for the workers who have been injured at work.

Call (619) 296-0005 for Best Lessors Risk Insurance in San Diego, CA

To safeguard your leased property, you have to avoid many risks that could eventually cause you to lose not only your hard earned money, but also your loyal clients and good reputation. One way of defending yourself is acquiring Lessors risk only coverage which serves as financial aid in case you’re found liable of tenants’ claims. At Herriott & Mijailovic, we strive to assist property owners in San Diego by providing exceptional service. We pick insurance products that match your needs as close as possible, enabling you to proceed with confidence. We understand that security and peace of mind is what you’re looking for and this is what we can provide. When you work with us you know that you will be supported every step of the way and that your business will have a strong safety net. Call today! (619) 296-0005.