Do I Need Insurance If My Landlord Has Insurance?

If you are planning to rent a commercial office or dealer location, you need insurance to protect your business and your assets.  Most leases require such insurance before allowing the rental.

WHY:  Your landlord’s commercial insurance policy does not protect YOU or your BUSINESS.  If you are sued or held liable for any action in connection with the operation of YOUR BUSINESS, the landlord’s insurance will not respond.

Landlords are required to maintain the property and keep it safe for you, your employees, and your customers.  They are NOT responsible for your business operations. 

EXAMPLE: A customer’s hand, or that of his child, is accidentally closed in a car door, your landlord’s insurance will not respond, and you could be out of business due to that loss.

To protect you and your landlord, the lessor typically requires that they be included on your insurance as an additional named insured.  Listing the landlord does not take away from your protection, but rather protects him IF he is sued along with you as a result of your business operations. 

This is an inexpensive additional protection for both landlord and tenant. 

EXAMPLE: A customer sues both you and your landlord for a liability loss directly resulting from your business operations.  If your landlord is listed as additional insured, he is exposed to no risk as your carrier will be responding to the claim.

If your landlord is not listed, he must submit the claim to his carrier as well.  Though they WILL DENY coverage, the landlord incurs any damages as a result of claim filing, legal costs if any, time involved in dealing with an unnecessary event.

IN SHORT: AS A COMMERCIAL TENANT, YOU SHOULD PROTECT YOURSELF AND YOUR LANDLORD VIA INSURING YOUR COMMERCIAL OPERATION.  YOU SHOULD LIST YOUR LANDLORD AS AN ADDITIONAL INSURED AND YOURSELF AS AN INDIVIDUAL INSURED, IN ADDITION TO NAMING YOUR BUSINESS AS PRIMARY INSURED.