Lessor’s Risk (LRO)
Do you find yourself ready for that final, big, career change, as I do myself? Retirement? If you have an office building, this brings up the question “What am I going to do with this building? If selling is not an option, you can consider leasing the building out to another business and if so, we can provide coverage for you, as a landlord. We have several A+ rated markets that we can review the risk with.
The tenants’ operations must be reviewed for acceptance and the tenant must carry commercial general liability coverage with limits equal to or greater than the building owner. They must also name the building owner as an additional insured. Applicants should maintain certificates of insurance verifying acceptable GL limits and additional insured status. Applicants must have a current/complete listing of all tenants and understand their operations, as there are some tenants that would be a classification our carriers may not write. If the tenant’s exposure is prohibited with a carrier, 90% of the time, they won’t write the lessor’s risk for the building. The applicant should not have an active role or ownership in the actual operation of any leased facility. The operating entity and building-ownership entity must be two distinct legal entities. Even if both entities are owned by the same person, there should be the lease agreement should contain a hold harmless in favor of you, the building owner.
So if you find yourself with an owned office where you’ll be leasing it or have a client in this situation, please give Bloss & Dillard a call so we can help make those golden years just a little less stressful.
