Damage to premises rented to you coverage

General liability insurance provides important protections for businesses against third-party liability claims. It’s coverage that all businesses should have. A standard commercial general liability policy protects against public liability, like bodily injury to customers, visitors, and other non-employees. It also covers property damage to assets that are owned by third parties and intellectual property claims, including copyright infringement, defamation, libel, and slander.

An additional insured endorsement can be added to a general liability policy to extend coverage to subcontractors, vendors, and other business partners. It allows third parties to reduce their liability exposure for claims that arise from work performed on a business’s behalf.

A commercial general liability insurance (CGL) policy is an important part of a business’s risk management strategy. If a dispute goes to court, the policy will cover legal fees, court costs, witness fees, and other litigation expenses, regardless of whether the business is found liable. It will also cover a potential settlement or judgment. This protection allows a business to continue operating without the fear of being financially ruined by lawsuits.

In addition to a general liability policy, many businesses also obtain business hazard insurance to protect their property from damage or theft.

“Damage to rented premises” coverage, also known as "tenants legal liability," is a type of property insurance that is included in a commercial general liability insurance policy. It is typically found in the Coverage A portion of a policy and can't be purchased separately.

Damage to rented premises coverage is a type of insurance specifically for commercial property that a business leases or rents. Without this coverage, a business owner could face significant financial premises liabilities for repairs or legal issues if an accident results in a lawsuit or judgment. It protects businesses from having to pay expenses out-of-pocket or from facing bankruptcy or closure if they are unable to cover accidental damages.

“Damage to premises rented to you” insurance covers any type of damage to a rented property if it is occupied for seven days or less, including water damage. After seven days, it only covers accidental fire damage. Intentional damage and acts of God are not covered.

For example, a small catering business operates from a rented commercial kitchen space. One evening, after a busy day of food preparation, an employee forgets to turn off a stove before leaving. Overnight, the stove ignites nearby packaging materials and creates a fire that damages the kitchen walls, ceiling, and storage area before the sprinkler system extinguishes it.

Without coverage, the catering business would be liable for the cost of the repairs, which could be significant. However, because the business carries damage to premises rented coverage as part of its general liability policy, the insurance company covers the accidental fire damage, which allows it to continue operating.

A coverage limit is the maximum amount an insurance company will pay for covered damages to property a business is renting, such as an office space, retail location, or warehouse. Businesses should carefully evaluate this limit to ensure they have adequate coverage. They should consider the size and value of the premises, the nature of their operations, and industry-specific risks.

This statement is typically found in a general liability insurance policy. It refers to the standard coverage limit of $100,000 for “damage to premises rented to you” coverage. The $100,000 coverage limit represents the maximum amount the insurance company will pay for covered damages.

For many businesses, the standard $100,000 limit is not enough. It depends on the business activities and the value of the rented property. Many insurance companies give businesses the option to increase their limit to $1,000,000 for this type of coverage for an additional premium. The higher limit provides significantly greater financial protection against accidental property damage, and is especially important when the value of the property is unknown.

Any business that operates from leased or rented space should ensure they have adequate “damage to premises rented to you” coverage. It is essential regardless of whether a business signs a long-term lease or temporarily occupies a space.

If a business operates a pop-up shop, temporarily leases event venues, or occupies trade show booths for just a few days, it still faces liability exposure for potential property damage. Without proper coverage, these short-term rental arrangements could lead to significant out-of-pocket expenses if an incident occurs while a business is occupying the property.

Fire legal liability is part of “damages to premises rented to you” coverage and is included in a commercial general liability policy. It specifically addresses fire damage to rented property caused by negligence.

It's easy to get general liability insurance with Insureon. Just fill out our easy online application to receive quotes from trusted providers. Our expert insurance agents are available to help answer any questions and help you find the best small business insurance for your needs. Most businesses can get same-day coverage and easily download a certificate of insurance as proof of coverage right away.