If you rent the space in which you conduct your business, you’ll likely want to consider damage to premises rented to you coverage. This coverage protects the rented space in the case of a covered incident.
What is damage to premises rented to you and what does it cover?
Typically found in general liability policies, “Damage to Premises Rented to You” coverage protects you in two ways by providing:
- Liability coverage for fire damage your business causes to premises you’ve rented.
- Liability coverage for damage – other than fire damage – to premises and their contents, rented or temporarily occupied by you for a period of 7 days or less so long as you do so with the owner’s permission.
Finding out if you have this coverage can be confusing. This is because coverage is not directly stated in the insurance policy. Instead, it is given back by exceptions to certain exclusions found in the liability section of the policy. We recommend chatting with a licensed insurance agent or broker to better understand what your policy covers.
Limits
Coterie’s Business owners and General Liability policies include “Damage to Premises Rented to You” coverage with a basic limit of $100,000. For an additional cost, you can choose to increase this limit to a total of $1,000,000.
Depending on where you live, you may want to select higher limits to better provide coverage. For example, if you live in California where costs to rebuild are high, you’ll likely want higher limits. Your insurance agent can help ensure you are adequately protected.
Who needs this type of coverage?
If you rent space in commercial buildings, you likely need this coverage. In fact, many times coverage is required by the terms of the lease agreement.
You’ll also want to consider this coverage if you have a pop-up or short-term (less than 7 days) events in rented spaces.
What do I need to know about this coverage?
This coverage is not intended to replace or act as primary property coverage on any building or space you rent.
This means that the “Damage to Premises Rented to You” limits under your BOP or GL policy will only apply after all applicable property insurance coverage is exhausted.
“Damage to Premises Rented to You” coverage applies only to damages for which you are determined to be legally liable. It does not apply to fire or other damage caused by acts of god or by other perils for which you are not legally liable.
Get help and get insured
As a small business owner, we know insurance can be confusing. Talk to your agent or broker, or contact Coterie Insurance if you have additional questions.
