Abram Interstate Insurance Services, Inc., CMGA

Helping Independent Insurance Agents Since 1996

Why Your Customers Need Lessor’s Risk Insurance | Product Highlight

Published on June 13, 2017


Being a property owner can be a lucrative investment — especially in California. With population increase on the rise in our beautiful state, real estate is becoming a better and better bet (with caution and wisdom of course). However, when you get into the real estate investment property sector, you open yourself up to a load of liability, especially in the commercial sector.

With renting out commercial real estate, your customers have more to gain, but also more ways they could lose. This is your clients need Lessor’s Risk Insurance (LRO Insurance).

What is Lessor’s Risk insurance and why is it important?

The Pekin Insurance Blog puts it this way:

 In simple terms, taking out a Lessor’s Risk insurance policy is protecting you and your investment from people who sustain injuries or damages by use of or interaction with your property, as well as . However, depending on the limits of your coverage, this policy can also cover special situations that arise, such as:

  • Litigation expenses from lawsuits and processes
  • Repair or replacement of building owner’s belongings such as hallway furnishings
  • Business Income and extra expense coverage

Can you see how the expenses begin to pile up just with one mishap? As a property owner, you should require your tenants to obtain necessary coverage on their business liability and personal property. Including that mandate on your lease along with naming you, the property owner, as an additional insured will provide extra shielding against any lawsuits.

 Lessor’s Risk Insurance Product Highlights:


  • Owners of commercial buildings with tenants.


Package: Property & General Liability

Higher Deductibles Available

Optional Coverages

  • Business income and extra expense
  • Building owners endorsement
  • Lobby and hallway furnishings owned by the insured are included in building coverage
  • Building ordinance and law


Underwriting Summary

  • All commercial tenants must carry their own General Liability Insurance naming the applicant as additional insured with equal or greater limits.
  • The plumbing, HVAC, wiring and roof need to be updated in the last 30 years.
  • Maximum of 2 apartments.
  • Most tenant occupancies are eligible
  • Buildings must be wholly leased to others, with less than 10% occupancy by owner for rental or building maintenance.
  • All buildings must sustain a minimum occupancy rate of 80%.
  • Read more guidelines HERE or Chat with us online now for a quick question!


Click here to submit a one-page quick-quote application

Abram Interstate Insurance Services, Inc. is a California wholesale insurance broker (CMGA) that has licensing and expertise to place business in both admitted and non-admitted markets for Personal Lines Insurance, Commercial Lines Insurance, and Agribusiness Insurance in California and surrounding areas.

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