Business Insurance for Commercial Property Landlords

Commercial landlords sometimes must carry errors and omissions (E&O) insurance, especially if they handle their own property management. Entities that may require coverage include:

• Your state. Some states, such as Rhode Island, require E&O insurance for all active real estate licensees, including property managers and real estate agents.
• Local boards and professional organizations. These often mandate or recommend E&O insurance for their members. For instance, the National Association of Realtors (NAR) strongly recommends insurance and offers access to several options.

Even when it's not required, errors and omissions insurance provides crucial protection against lawsuits from unhappy tenants. It covers everything from security issues to poor maintenance and incorrect billing.

You may need to add a tenant discrimination endorsement to help pay for legal defense costs related to unfair treatment.

For property coverage and protection against tenant liability claims, commercial landlords often invest in the following:

• Lessor’s risk only (LRO) insurance: This policy covers legal costs if a tenant sues over an incident that happened in a space rented out by you, such as an office or storefront.
• Building insurance: If a fire, storm, or vandal damages your building, this coverage will help pay for repairs.

You can also ask your tenants to include you in their general liability policies as an additional insured. This helps protect you against lawsuits arising from the tenant's negligence.

Commercial landlords and other property owners often invest in additional policies to cover a wide range of insurance claims. You may want to consider the following:

• Business interruption insurance covers lost rental income and other financial losses tied to a covered loss of property, such as damage from a fire or natural disaster. It's also called business income insurance.
• Equipment breakdown insurance helps your business recover after the unexpected failure of crucial machinery, such as an elevator or HVAC unit.
• Commercial property insurance covers the cost of repairs or replacement if a fire, storm, vandalism, or other incident damages or destroys your business property or its contents.
• Commercial crime insurance comes in several forms that protect against employee theft, burglary, and fraud. It provides important coverage if you handle rent payments.

Landlords and other small business owners can save money when shopping for insurance in several ways:

• Shop around. By filling out TechInsurance's easy online application, you can compare quotes from top-rated insurance companies to find a policy that fits your budget and insurance needs.
• Bundle policies. When you buy policies from the same provider, you can often combine them in a cost-saving package. The most common example is a business owner's policy, which includes general liability and commercial property coverage.
• Pay the full annual premium. In the long run, it's usually cheaper to pay the full annual premium instead of smaller monthly installments.
• Choose lower limits or a higher deductible. Though you'll want enough coverage for a potential claim, you can opt for lower policy limits or a higher deductible as an easy way to reduce your premium.
• Pick actual cash value coverage. When buying business property insurance, you can choose between actual cash value and replacement cost coverage. The former takes depreciation into account, so it's less expensive but won't pay out as much on a claim.

Our licensed agents can help find you the best insurance for commercial landlords without breaking the bank, giving you financial protection and peace of mind.