Ann Mullen
President at Mullen Insurance Agency, Inc. - Garland, Texas
REQUIRE TENANTS TO CARRY INSURANCE – YES/NO
So many of our dealer customers also have rental income properties, and that trend is on the increase across the industry. One negative result is dealer-owners getting hit for claims for which they are not or should not be responsible.
The law does not require your tenants to purchase their own insurance. Nonetheless, given its benefits to both landlords and tenants, you, as landlord have the right to require that purchase prior to leasing a property.
The ‘WHY’ is important: A lease requiring your tenant to carry insurance benefits landlords by reducing the landlord’s liability and preventing them from paying for damages outside of their control. The landlord’s liability policy likely won’t cover a tenant’s property if damaged, or someone is injured due to the tenant’s carelessness and/or operation of their business.
However, that does not prevent the injured party from suing everyone in sight. To increase the landlord’s ability to buy competitively priced insurance, it is typically necessary to require their tenants to carry liability insurance, and to also list the property owner as an additional insured. This additional protection often has a premium of $50 or less annually and prevents a lot of legal and hassle expense in the event of a claim.
An example of another pitfall of an uninsured tenant is: A fire or other accident (through no fault of the tenant) causes damage to the tenant’s uninsured personal property, and they have no other recourse to cover the loss of the property or loss of any income. The first instinct is to come after the building owner whose insurance which may or may pay. Regardless the cost of attorneys and time are unnecessary expenses if your tenant invests in a policy to cover their business and their business property. When you require insurance, your tenant will have the option of buying coverage for his personal property, along with many other protections available.
BOTTOM LINE ON REQUIRING YOUR TENANT TO CARRY INSURANCE
TO PROTECT YOUR BUSINESS AND YOUR TENANT’S BUSINESS, REQUIRE YOUR TENANTS TO PROVIDE PROOF OF INSURANCE, AND A CERTIFICATE LISTING YOU AS LANDLORD AND ADDITIONAL INSURED.
Mullen Insurance Agency Is Ready To Help
Our clients can rest assured, knowing our priority is providing a quality product with a competitive premium as we have done for the last thirty-three years. That goal remains and the chosen replacement products meet our standards and our clients’ needs.
Do not hesitate to contact me. I’m eager to receive your feedback, questions and comments. If you have specific subjects or insurance concerns you would like to discuss, please let me know. amullen@mulleninsurance.com or www.mulleninsurance.com.
If you’d like additional information on insurance for your business or you’d like to request a quote, please visit https://mulleinsurance.com/#Insurance-quote or give us a call at 972-681-6297.
Ann Mullen-Martin
President
MULLEN INSURANCE AGENCY, INC
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