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What is LRO Insurance & Why Do Your Clients Need it?

For clients in the commercial property industry, operating with the right business insurance level is one of the most critical components of their operations. If they own buildings and use them for leasing retail, office, personal space, or warehousing, having lessor’s risk insurance is the financial tool that can protect them against a wide range of legal problems. It can help protect clients from lawsuits if a lessee of one of their properties sustains bodily injury or damage to the property while on the premises.

Here’s a better look at LRO Insurance Programs and why they’re helpful for your clients in the commercial property industry.

Liabilities Covered by LRO Insurance Programs

Lessor’s risk insurance protects clients from liability arising from property loss, including damage and destruction of property, theft, and vandalism. It only pertains to property located in the building that is owned by your client. This kind of insurance also protects clients from claims for injuries to a lessee and its employees, as well as any customers who might enter the property during business hours. It may also provide coverage for damage caused to lessees or their property arising from pollution.

Limits to LRO Insurance Programs

When a client opts to purchase LRO coverage, they will choose coverage limits, representing the most the insurance provider will pay for a single loss. If a lessee’s loss or bodily injury liability exceeds their coverage limits, they will be accountable for the difference between the loss’s cost and the lessor’s risk insurance limits.

Clients must be made aware that choosing the highest limit they can afford can help maximize their protection against lessee liability. A coverage limit of $1 million is usually sufficient. However, if they lease parts of their buildings to multiple tenants, they may need a higher limit.

Considerations of LRO Insurance Programs

To qualify for lessor’s risk insurance programs, potential clients must usually lease out the entire building or occupy no more than a quarter of it. Some policies may cover multiple properties, but most LRO insurance programs are specific to one location.

It’s also essential for clients to avoid using LRO insurance as a substitute for general liability policies, which cover their building, their property located within the building, and liability to occupants for injuries not associated with a lessee’s business operations.

About Irving Weber Associates

At Irving Weber Associates, Inc., we work with agents and brokers to access quality programs for various industries across the country. Here is more information on the LRO Program[TB1]  offered through IWA.  Our programs include specialty coverages that cater to those in the dry cleaning, laundry, restaurant, and grocery industries. For a detailed look at how we can safeguard your insurance services with a custom-tailored package, please contact our specialists today at (855) 764-7406.